Preamble

The House met at Half past Two o'Clock

PRAYERS

[Mr. SPEAKER in the Chair]

PRIVATE BUSINESS

BANK OF SCOTLAND ORDER CONFIRMATION BILL

Considered; to be read the Third time upon Wednesday next.

Oral Answers to Questions — COMMONWEALTH RELATIONS

Central African Federation

Mr. Fenner Brockway: asked the Under-Secretary of State for Commonwealth Relations if he will give an assurance that Her Majesty's Government stands by the principles of the preamble to the Act setting up the Central African Federation.

The Under-Secretary of State for Commonwealth Relations (Mr. Douglas Dodds-Parker): I assume that the hon. Member refers to the preamble to the Federal Constitution. In that case, the answer is, "Yes, Sir."

Mr. Brockway: May I congratulate the hon. Gentleman on his new office, as I did his colleague yesterday? Would he agree that it is an obligation on Her Majesty's Government to see that those who signed the preamble should sincerely accept it? If so, has his attention been drawn to the remarks of the Prime Minister of the Federal Government on 29th July, in replying to a debate, where the preamble was quoted as having been forced—

Mr. Speaker: The Minister cannot be held responsible for statements by a Minister of another Parliament.

Mr. Brockway: On a point of order. The preamble was signed by other Governments as well as our own, Sir, and those Governments have a responsibility to our Government in signing it. Surely, if anything is done on the part of a

responsible member of that Government which does not accept the preamble, it would be the duty of our Government to raise the matter with them.

Mr. Speaker: I think that is all rather hypothetical. A Minister can only be questioned on matters for which he is administratively responsible. I do not see how he can be responsible for something said by a Minister of another Parliament.

Mr. Brockway: Further to my point of order—because the rights of this House and of the Government are involved—may I ask the hon. Gentleman whether any action has been taken by the Government in this matter?

Mr. Dodds-Parker: The United Kingdom Government have every reason to believe that the Prime Minister and the Government of the Federation stand by the principles of the preamble. I might also say that the hon. Gentleman has picked out a part of one sentence, and that if he had read the whole speech he would have seen that Sir Godfrey Huggins showed no sign of wishing to depart from the principles of the preamble.

Mr. Hale: During a debate in this House when the Bill was before it, Viscount Chandos gave the clearest undertaking that it was within the competence of this House to revoke the Constitution if circumstances ever arose which demanded that step. What has happened now is that my hon. Friend has sought to bring before the House information relevant to that statement. The Minister has been allowed to reply to it, to refer to the speech and to say that my hon. Friend sought to misrepresent it without my hon. Friend being permitted to say what he wanted to say. Is that not an intolerable position?

Mr. Speaker: The hon. Member should not use that adjective. The position is that if it were a question before the House of revoking the Constitution, then it would he in order. But it is the rule of the House—and the hon. Member will see how wise is that rule—that Ministers cannot be asked to comment on statements made by a member of another Government which is, at the moment, constitutionally set up.

Mr. J. Griffiths: I appreciate the point you have made, Mr. Speaker, but may I


ask whether your Ruling means that no Questions about the Federation can be tabled in this House of Commons?

Mr. Speaker: It does not mean that at all. It is only to try to confine Questions to their primary purpose of cross-examining Ministers on matters for which they are responsible.

Mr. Braine: On a point of order. Is it not permissible, Mr. Speaker, for someone on this side of the House to ask a supplementary on this important matter.

Mr. Speaker: That is another matter.

Bechuanaland, Basutoland and Swaziland (U.N. Assistance)

Mr. Hale: asked the Under-Secretary of State for Commonwealth Relations what assistance is at present being received from United Nations technical assistance or from other United Nations agencies, in Bechuanaland, Basutoland and Swaziland, respectively.

Mr. Dodds-Parker: The Administrations of the three territories are aware of the opportunities for assistance provided by United Nations agencies. Applications for assistance have been made to the World Health Organisation and to the United Nations International Children's Emergency Fund, of which two have been accepted and three are under consideration.
I am circulating details in the OFFICIAL REPORT.

Mr. Hale: I am much obliged to the hon. Gentleman, but as his colleague, the

APPLICATIONS FOR ASSISTANCE FROM UNITED NATIONS AGENCIES SUBMITTED BY THE HIGH COMMISSION TERRITORIES


Territory
Project
Assistance sought
Remarks


W.H.O.





Bechuanaland Protectorate
Yaws campaign
1 Doctor
Supplies and equipment provided by U.N.I.C.E.F.


Bechuanaland Protectorate
Tsetse control survey
1 Consultant
Application under consideration by W.H.O.


Basutoland
Tuberculosis survey and control campaign.
Doctors, Nurses, Equipment and Supplies.
Application under consideration by W.H.O.


Basutoland
Nutrition survey and control campaign.
2 Doctors, 1 Nurse
Application under consideration by W.H.O.


 U.N.I.C.E.F.





Basutoland
Vaccination campaign against diphtheria and whooping cough.
Transport and Supplies
Application accepted.

In addition, two W.H.O. fellowships have been awarded for studies in the medical field to officers in the service of the Bechuanaland Protectorate Administration.

Minister of State for Colonial Affairs, told the House yesterday that every attempt was being made to utilise these agencies in Africa, while the United Nations Report makes it clear that virtually nothing has been done in Bechuanaland in connection with those agencies, will he take steps to see that it is constantly encouraged? Will he bear in mind that the only expert in Bechuanaland in connection with the Colonial Development Corporation is being sued for damages for £600,000 for not being sufficiently expert?

Mr. Dodds-Parker: I shall certainly see that every step is taken to get assistance from the United Nations agencies, but I would remind the House that all three territories receive generous assistance from Colonial Development Corporation funds.

Mr. Osborne: Can my hon. Friend confirm that the United States provides 15s. out of every £ given to United Nations assistance funds?

Mr. Dodds-Parker: Not without notice, but the United States do certainly provide very generous assistance.

Miss Lee: Would it not be in keeping with the principles of the United Nations if Seretse Khama were returned to Bechuanaland and, if he were returned, would it not be a contribution towards seeing that economic affairs there were put in better order?

Mr. Dodds-Parker: That is a quite different question.

Following are the details:

Swaziland (Railway Extension)

Mr. Hale: asked the Under-Secretary of State for Commonwealth Relations whether he is now in a position to announce the result of the discussions with reference to the proposed railway extension in Swaziland.

Mr. Dodds-Parker: I having nothing to add to the answer given to a question by the hon. Member for Leyton (Mr. Sorensen) on 3rd June, in which it was stated that the possibility of constructing a railway from Lothair into the Usutu forest area of Swaziland has for some time been under examination, in consultation with the Government of the Union of South Africa. Any extension beyond that is not at present contemplated.

Mr. Hale: Has nothing emerged from the 140 days of prolonged cogitation and lucubration which have passed since then? Is there nothing that the Minister can tell the House?

Mr. Dodds-Parker: No, Sir. I think, as the hon. Member, and other hon. Members on both sides, may know, there are big schemes for railway and other transport development in Africa south of the Equator. This is a particular case in which there are factors not yet known, and which may not become known for some time, and it is not possible to make a decision yet.

Oral Answers to Questions — TRADE AND COMMERCE

C.A.T.T. (Commonwealth Preferences)

Mr. H. Wilson: asked the President of the Board of Trade if he will instruct the delegation to the forthcoming Conference on the General Agreement on Tariffs and Trade to ensure that no steps will be taken to make the agreement permanent until the provisions banning new or additional Commonwealth preferences are removed therefrom.

Lieut.-Colonel Lipton: asked the President of the Board of Trade what steps he is taking during the forthcoming General Agreement on Tariffs and Trade negotiations to retain Imperial Preference and to uphold the right to grant and receive such preferences as are mutually agreed with Empire countries.

The President of the Board of Trade (Mr. Peter Thorneycroft): The question of Commonwealth preferences in relation to the General Agreement on Tariffs and Trade has been discussed at a number of Commonwealth conferences in the last two years. There has been general recognition by all Commonwealth countries of the value of existing preferences which, under the terms of the General Agreement, we are at liberty to continue.
But it has been, and remains, the considered view of most Commonwealth countries that it would not be desirable or feasible to ask the foreign countries which are parties to the General Agreement to change the present rules contained in Article 1 of the Agreement affecting discrimination against their goods. They prefer, instead, to consider any individual cases on their merits and where appropriate to seek to deal with them by negotiation or waiver in the G.A.T.T. This is, in the circumstances, the policy which Her Majesty's Government propose to pursue.

Lieut.-Colonel Lipton: Is the Minister aware that his scandalous betrayal of Imperial Preference has already quadrupled emigration from Jamaica to this country since the present Government came into power? Will he please look at page 12 of "Britain Strong and Free" and then hang his head in shame?

Mr. Thorneycroft: If I may say so, the hon. and gallant Gentleman is a little harsh on the Government which negotiated this agreement.

Mr. Wilson: If the right hon. Gentleman is going back in history as far as 1947 he should take it back to 1943 when the first committal was entered into on this question by the Coalition Government. Is he aware that the 1947 agreement was a purely temporary one which assumed that there were to be big changes in United States trading policy which have not yet taken place?

Mr. Thorneycroft: I was not attacking the right hon. Gentleman—I was seeking to defend him from his friends. All I was asked was about present policy and I indicated a policy which has the broad support of the Commonwealth as a whole.

Mr. H. Wilson: asked the President of the Board of Trade what instructions


are being given to the United Kingdom delegation to the Geneva Conference to consider the working of the General Agreement on Tariffs and Trade.

Mr. P. Thorneycroft: The considered judgment of the Government, which has the general support of organised industry, is that the General Agreement on Tariffs and Trade is an essential instrument for maintaining order and fair play in international trade; and it will be our aim to work for the reaffirmation and, where necessary, strengthening of its provisions, in order that it may play its part in further progress towards wider trade and payments. Instructions will be given to our official delegation in this sense.

Mr. Wilson: I am sure that the right hon. Gentleman will have the good wishes of all on this side in these negotiations, on the basis of what he has just told us, but will he tell us whether, in the discussions with the Commonwealth Governments, there has been a broad agreed Commonwealth line on the forthcoming conference?

Mr. Thorneycroft: There has. It has been fully discussed both in Washington and in London. In London the officials meeting there discuss the matter with a view to reference to their own Governments who, of course, form independent judgments in these matters, but I can say that, broadly speaking, we are pursuing a common line on these main issues.

Mr. Russell: Can the Minister say whether Colonial, as distinct from Commonwealth. Governments are in agreement on this?

Mr. Thorneycroft: Yes, Sir. Colonial Governments have been brought into consultation in this matter. There are special problems in relation to the Colonies, affecting them differently from other sections of the Commonwealth. These matters are under discussion with them at the present time to see whether any action can be taken to meet them.

United Kingdom-Dominion Wool Disposals Limited (Profit)

Mr. H. Wilson: asked the President of the Board of Trade the total profit earned on behalf of the British taxpayer from the activities of United Kingdom-Dominion Wool Disposals Limited from 1945 to 1954.

Mr. P. Thorneycroft: The United Kingdom's share of the net profits earned during this period was £86 million.

Mr. Wilson: In view of all the statements made by the right hon. Gentleman and his colleagues about losses on State trading and other materials, will he not now pay handsome tribute to this fine profit of £86 million earned for the British taxpayer by State trading?

Mr. Thorneycroft: I shall certainly pay tribute to Sir Harry Shackleton, the former Wool Controller, and to Mr. F. S. Arthur, for the very successful results they achieved. However, in order to do this again we should have to reproduce the same conditions—to start a war, to accumulate over four years a large stock of wool by buying and selling at fixed prices—a procedure which the Commonwealth wool-producing countries would not accept in peace time—and then sell the resulting stock on a rising market.

Mr. Wilson: Since the right hon. Gentleman attributes this very handsome profit to the fact that this wool was first accumulated and then sold on a rising market, will he not equally admit that all the complaints he made about raw cotton were due to the fact that having made profits on a rising market there were some losses on a falling one?

Mr. Thorneycroft: I am not dealing with that, but with this case.

Mr. Callaghan: Has the President noticed that all one has to do to make a loss of £20 million on British Road Services is to try to sell a few lorries?

Hong Kong Knitted Gloves

Mr. Osborne: asked the President of the Board of Trade if he is aware that the imports of knitted gloves from Hong Kong at prices considerably below their cost of production in this country is continuing to cause anxiety to British manufacturers; and if he will make a statement on the position.

Mr. P. Thorneycroft: This problem has been carefully examined in consultation with the National Hosiery Manufacturers' Federation, since the full discussion on the Adjournment debate initiated by my hon. Friend the Member for Yeovil (Mr. Peyton) on 8th April. These products are free of import duty, under


the Import Duties Act and the Ottawa Agreement, and it is not the policy of Her Majesty's Government to restrict imports from the Colonies by imposing quantitative restrictions.

Mr. Osborne: But is my right hon. Friend aware that since that Adjournment debate these imports from Hong Kong have increased tremendously? Will he please have the matter looked into again to see whether Japanese goods are not coming through Hong Kong and getting the benefit of Imperial Preference?

Mr. Thorneycroft: I should certainly take any action possible to see that Japanese goods are not getting the benefit of Imperial Preference. I can assure my hon. Friend that we are not oblivious to the difficulties in this position and that the Minister of State is to discuss this, among other problems, with the National Association of Glove Manufacturers in the near future.

Mr. P. Morris: Does not the President agree that a very large glove industry in Hong Kong is owned by British manufacturers and that it is wrong to assume that they are all Japanese goods?

Mr. Osborne: I did not say all.

Mr. Thorneycroft: There is no question of Japanese goods getting Imperial Preference. This is Hong Kong manufacture, and I have no doubt that some are manufactured by British-owned firms in that Colony.

Mr. Peyton: Is my right hon. Friend aware of the very disastrous increase in imports? For instance, in the case of woollen gloves the volume imported in August increased 50 times as compared with January? Is he further aware that the home industry has no chance whatever of competing in these goods in price? Would he please give urgent consideration to the only possible solution, namely, a quota restriction?

Mr. Thorneycroft: I am sympathetic with the points which my hon. Friend has very properly put and which he elaborated in the Adjournment debate, but he should remember that the free entry of Commonwealth goods has been a tradition in this country for some time. In fact, the balance of trade in Hong Kong is very heavily in our favour.

Hire Purchase Interest Rates

Mr. Steward: asked the President of the Board of Trade if he is aware that extortionate rates of interest are being charged by some firms on hire purchase transactions since controls were lifted in July; and what safeguards exist under his revised regulations to prevent the seizure of goods when the purchaser fails to pay the instalments.

Mr. P. Thorneycroft: I have seen allegations that extortionate rates of interest are being charged by some traders. The Hire Purchase Orders revoked in July did not control interest rates. The Hire Purchase Acts provide that no agreement covered by the Acts is enforceable unless the attention of the hirer has been drawn to the cash price of the goods in question before any agreement is signed, and the owner cannot recover possession of the goods once a third of the hire purchase price has been paid without obtaining a court order.

United States Contracts (British Bids)

Mr. Jay: asked the President of the Board of Trade what reply he has received to representations made to the United States Government about the grant of further contracts by the United States Army Department for the Chief Joseph and Dalles dams to United States firms despite tenders at lower prices by the English Electric Company.

Mr. P. Thorneycroft: The United States Government in their reply confirmed that the United Kingdom firm's bids were the lowest which complied fully with the technical requirements, but stated that, after weighing all the factors involved, the bid of the domestic firm was not considered unreasonable under the provisions of the "Buy American Act."

Mr. Jay: As the right hon. Gentleman has made what he has called representations at the highest level, and as it is now confirmed that British prices were much lower, is this not a really exceedingly disappointing result?

Mr. Thorneycroft: Yes, I think it is an exceedingly disappointing result. I may say that I normally defend Americans and things American, but in this matter I must say that they have fallen below


the level of events. They have made various statements about the reform of the "Buy American Act" and of an interim executive order which would put the matter on a fairer trading basis from our point of view, and I hope that they will take some action more consonant with their position as a great trading nation.

Mr. Jay: Does the right hon. Gentleman propose to make further representations in this matter?

Mr. Thorneycroft: I have made all the representations I can in this case. I do not think there is any further matter that I can draw to their attention.

Mr. Nabarro: Can we not have a "Buy British Act" which would enable the National Coal Board to buy its heavy opencast coalmining machinery from Ransomes & Rapier, Ltd. of Ipswich, instead of placing orders in America?

Mr. Thorneycroft: I think that if we all pursued these policies the world would become a very much poorer place than it is today.

Mr. Jay: asked the President of the Board of Trade whether his attention has been drawn to the grant of a transformer contract for a hydro-electric project in Arizona by the United States Department of the Interior to United States firms; whether he is aware that a British firm had tendered at a much lower price; and what representations he has made to the United States of America on this matter.

Mr. P. Thorneycroft: Yes, Sir. I have had a report of the circumstances of this case from our Embassy, who were in touch with the United States authorities when the award was under consideration. On the final evaluation, the United Kingdom bid was not the lowest foreign bid; and, while I am disappointed by the decision, I do not propose to make special representations on this case.

Petroleum Products (Prices)

Mr. Dodds: asked the President of the Board of Trade if he will now request the Monopolies Commission to carry out an investigation into the price structure of petrol and oil in this country, with a view to reduction in prices.

Mr. P. Thorneycroft: I would refer the hon. Member to the answer I gave on 4th May to similar Questions on this subject.

Mr. Dodds: Does the right hon. Gentleman say that he has not changed his mind since 4th May?

Mr. Thorneycroft: No, I have been consistent in my mind since that date.

Oral Answers to Questions — NATIONAL FINANCE

International Monetary Fund and Bank (Washington Meetings)

Mr. Steward: asked the Chancellor of the Exchequer whether he will make a statement on the recent Washington meetings of the International Monetary Fund and the International Bank for Reconstruction and Development.

The Economic Secretary to the Treasury (Mr. R. Maudling): My right hon. Friend and I were glad to have the opportunity of taking part in the recent meeting of the Boards of Governors of the International Monetary Fund and the International Bank. These meetings afford a valuable opportunity to review the performance of the institutions and world economic prospects.

National Land Fund

Mr. K. Robinson: asked the Chancellor of the Exchequer if he will make a statement on the future of the National Land Fund.

The Financial Secretary to the Treasury (Mr. Henry Brooke): No, Sir; not at present.

Mr. Robinson: Before adopting the suggestion made by the Public Accounts Committee, that this Fund should be handed back to the Exchequer, will the hon. Gentleman bear in mind that there are many purposes, such as the preservation of historic houses and national parks, for which the Fund could be used and which are wholly in conformity with the ideas of the House at the time that the Fund was set up?

Mr. Brooke: My right hon. Friend has read the comments of the Public Accounts Committee, and he will take all matters into consideration before reaching a decision.

Lieut.-Colonel Bromley-Davenport: Is my hon. Friend aware how delighted we are at the excellent and intelligent manner in which he has answered his first Question? Is he further aware that if he goes on in this excellent manner, we shall not only look forward to his early promotion but we on these benches will do all we can to further it?

Industrial Insurance Companies (Old-Age Pensioners' Policies)

Mr. Hale: asked the Chancellor of the Exchequer whether he is aware that some industrial insurance companies are offering to old-age pensioners who are compelled to surrender their policies, a sum as surrender value less than half the amount of premiums paid over a long number of years; and whether he is prepared to introduce legislation to deal with this matter.

Mr. H. Brooke: The owner of a whole life industrial assurance policy is entitled by law to a free policy for a reduced sum assured, if he discontinues payments after five years' premiums have been paid. In practice, the offices generally grant free policies after much shorter periods of payment. I see no need for further legislation, but if the hon. Member has any particular case in mind I will willingly look into it.

Mr. Hale: Is the hon. Gentleman aware that he has not answered his second Question quite so well as the first? Does he not know that many old-age pensioners are now having to sell their assets and are in very dire straits? Is the hon. Gentleman further aware that I have a case in mind in which premiums were paid for 18 years and that the total amount offered represents 37½ per cent. of the premiums paid; and that a free policy is no good because people need the money and will continue to do so while the present Government permits prices to increase?

Mr. Brooke: I answered the general Question which the hon. Gentleman put to me, and I offered to look into the details of any particular case which he might submit, so I thought that I had not done so badly.

Profits and Dividends (Percentage Change)

Mr. Jay: asked the Chancellor of the Exchequer the percentage change in profits and dividends, respectively, during 1954 compared with 1953.

Mr. Maudling: No figures can yet be given of profits earned in 1954. As regards dividends, the available reports indicate that the dividends declared during the first nine months of 1954 represented a gross return on invested capital of about 5·9 per cent. compared with about 5·4 per cent. for the same period of 1953.

Mr. Jay: Is the Minister aware that according to the "Financial Times" gross dividends this year have been increasing four times the rate of wages? Does he think that that situation, together with the high capital profits of the Stock Exchange, is helpful to industrial peace?

Mr. Maudling: My answer was based on the "Financial Times" statistics, and, I think, puts them in their right perspective.

Foreign Travel Allowance

Sir T. Moore: asked the Chancellor of the Exchequer whether he has any information about the estimated loss of foreign exchange which would be involved by abolishing the restriction on travel allowances altogether as compared with the increases to £100 and £70 as now contemplated.

Mr. Maudling: The loss involved cannot be exactly calculated, but might be considerable.

Sir T. Moore: While I am grateful for the recent concession and also for the consoling remarks of the Chancellor yesterday on the subject, may I ask my hon. Friend to bear in mind that increasing numbers of people in all walks of life in this country are now taking their holidays abroad and pay their own expenses? Does he realise the anxieties of these people about the difficulties they experience during these holidays through lack of currency?

Mr. Maudling: My right hon. Friend was glad to be able to increase the amount, and hopes to be able to go


further, but the increase in the travel allowance must be weighed against the other competing claims on the balance of payments.

Mr. Grimond: asked the Chancellor of the Exchequer if he will make a statement on travel allowances; and whether he will authorise a general allowance for the dollar area.

Mr. Maudling: My right hon. Friend has no general statement to make. He will authorise a travel allowance for the dollar area as soon as he feels justified in doing so.

Mr. Grimond: While thanking the Minister for this slight encouragement about the dollar area, may I ask him to press upon his right hon. Friend that very large sums of money are allowed for official travellers? Surely the time has come when a small sum should be allowed to ordinary people.

Mr. Maudling: My right hon. Friend is anxious to grant a travel allowance for the dollar area as soon as possible, but we are still having to restrict a number of dollar imports of great importance, including some raw materials, machinery, and so on, and until the time comes when the Chancellor feels that it would be justified he cannot do anything about a travel allowance.

Sir R. Acland: asked the Chancellor of the Exchequer whether he will give an estimate of the cost in foreign currency which will be involved in raising the basic travel allowance from £50 to £100.

Mr. Maudling: About £4 to £5 million.

Sir R. Acland: Will the Minister tolerate a slightly involved question, arising from that brief answer? Now that we can spend this large sum on frivolities for certain people, can we take it that in future, when we are asking for much smaller sums for United Nations technical assistance and such like, it will no longer be the plea of the Government that they would like to make an increased contribution but cannot afford to do so, which answer suggests that the Government do not want to spend money on that kind of thing?

Mr. Maudling: I think the hon. Member has failed to distinguish between the Government spending the taxpayers' money and the Government allowing the taxpayers to spend their own money.

Old People (Phillips Committee Report)

Mr. Dodds: asked the Chancellor of the Exchequer when a report is expected from the Phillips Committee, set up by him in July, 1953, to review the economic and financial problems involved in providing for old age.

Mr. H. Brooke: The Committee are at work on their report, but I cannot say by what date it will be completed.

Mr. Dodds: As pledges were given by the party opposite to restore the value of the £, and as the cost of living has risen, why is it necessary to wait for this Committee to report before restoring the value of old-age pensions?

Mr. Brooke: I think that all quarters of the House and members of the public attach a great deal of importance to this inquiry on which Sir Thomas Phillips and his Committee are engaged, and I think it is very desirable that we should see what they have to say.

Dr. Summerskill: Does that mean that an announcement regarding the increase in old-age pensions is indefinitely delayed?

Mr. Brooke: No, Sir.

Incapacitated People (Disability Allowance)

Mr. Peter Freeman: asked the Chancellor of the Exchequer whether he will introduce legislation in his forthcoming Budget by which a disability allowance is made to people totally incapacitated by accident or otherwise, as recommended by the Royal Commission on Taxation, Command Paper No. 9105, and proposed as being a minimum of £100.

Mr. H. Brooke: My right hon. Friend is carefully considering this together with all the other recommendations in the Second Report of the Royal Commission, but I cannot anticipate his Budget statement.

Mr. Freeman: Will the hon. Gentleman ask his right hon. Friend to give very sympathetic consideration to this matter at the appropriate moment?

Mr. Brooke: Everyone knows that the Commission's report is of great importance, but I am sure that the hon. Member will recognise that this is essentially a Budget question.

CIVIL SERVICE (SECURITY CHECK EXTENSION)

Mr. Grimond: asked the Chancellor of the Exchequer if he will make a statement on the extension of the security check in the Civil Service.

Mr. H. Brooke: In 1952, the Government introduced a special security procedure for investigating the reliability of civil servants employed on exceptionally secret work. It was then estimated that, outside the atomic energy field, not more than 3,000 posts would be involved. Experience has shown that further posts need to be included in order to work to a consistent and reasonable definition of exceptionally secret work, and the revised estimate is that about 10,000 posts will be subject to this procedure.

Mr. Grimond: Can the hon. Gentleman tell us what departments are involved? Can he give an assurance that nobody in the Civil Service will be penalised merely because he holds Marxist opinions, unless there is some reason for thinking that he will take some action deleterious to the country as a result, or unless he is in an exceptionally confidential position?

Mr. Brooke: I could not give a Departmental answer without notice, but I can assure the hon. Gentleman that there has been absolutely no change in the policy which was announced 2½ years ago.

Mr. Emrys Hughes: Will this not mean a big increase in the Secret Service in order to screen the Civil Service? Will it not also mean an additional number of civil servants, whom the Government are pledged to reduce?

Mr. Brooke: I do not think so. The Secret Service is very efficient.

Mr. W. R. Williams: Would it be correct to assume that this increase in the numbers of people who are to be

screened has been the subject matter of discussion with the Staff Side of the National Whitley Council?

Mr. Brooke: Yes, that is so.

COST OF LIVING

Mr. Hector Hughes: asked the Chancellor of the Exchequer what steps he proposes to take in the near future to reduce the high cost of living.

Mr. Maudling: The cost of living depends on many factors which cannot be dealt with adequately in reply to a Parliamentary Question and some of which are outside the Government's control.
The Government, for their part, will continue their various policies designed to provide stable economic conditions and so prevent inflation from forcing up prices. But any positive reduction of the cost of living must come, in the main, from reductions of costs and from increases in productivity, which are primarily the task of both sides of industry.

Mr. Hughes: Is the Minister aware that that is an evasive answer and that the present policy of the Government is denying millions of poor people access to the necessities of life? Will he take steps to rectify that situation?

Mr. Maudling: I cannot accept either of the assertions of fact contained in that supplementary question.

Lieut.-Colonel Bromley-Davenport: Is not the situation much better today than it was during the years of Socialist misrule?

Mrs. Mann: The hon. Gentleman says that a reduction in the cost of living can only be accomplished through increased productivity. How is it, then, that although we have had increased productivity in the past year it was accompanied by an increase in the cost of living?

Mr. Maudling: The fact is that in the last 18 months the cost of living has gone up three points, which compares very well indeed with the record of the previous Government.

Mr. Jay: If a reduction in the cost of living is outside the power of the Government, why did the Government make the promises they did at the last election?

Mr. Maudling: It is difficult to answer supplementary questions based on a misinterpretation of what I clearly said.

Dr. Stross: asked the Chancellor of the Exchequer the value, in terms of the present index, of the cost of living of the sum of 10s. in 1944, 1934 and 1924.

Mr. Maudling: Taking the internal purchasing power of 10s. as 10s. in 1924, 1934 and 1944, it is estimated that the corresponding figures in September, 1954, would be approximately 4s. 10d., 3s. 11d., and 6s. 6d. respectively.
This estimate is based on the cost of living index for the period before 1938, the consumer price index for 1938–53, and the interim index thereafter.

Dr. Stross: Does the Minister not agree that two things are shown by his answer, first, the inadequacy of social insurance payments today and, secondly, how desirable it is that, in future, they should be permanently pinned to the cost of living?

Mr. Maudling: I think it shows that when the cost of living rises people whose incomes are fixed feel the effect, and that certainly was true under the previous Administration.

Oral Answers to Questions — AGRICULTURE

Tenant Farmer, Peacehaven

Mr. P. Roberts: asked the Minister of Agriculture who is the tenant who is farming the requisitioned land at Peace-haven which is now the subject of a compulsory purchase order; how this tenant was chosen; what connection he has had with the agricultural executive committee; how much public money has been spent on this land since the date of requisition; and how much rent has been paid to the freehold owners since requisition.

The Minister of Agriculture and Fisheries (Mr. Heathcoat Amory): The requisitioned land concerned at Peace-haven and Saltdean is let on licence to four persons, all of whom were chosen by the East Sussex Agricultural Executive Committee. One licensee of 380 acres, who was chosen in 1946, became a member of a sub-committee and a panel of the Committee three years later. Another licensee of 40 acres, was a member of the Committee when chosen in 1952. He

was selected because the requisitioned land adjoins on two sides other land being farmed by him. The total expenditure on the land since it was requisitioned amounts to some £19,000 and compensation rental paid to the known owners amounts to some £4,700.

Mr. Roberts: In view of the expenditure involved, would my right hon. Friend agree that there are other methods of getting efficient agriculture beyond that of taking away people's private property? Will he reconsider this case, following the decision of his predecessor?

Mr. Amory: I have given a good deal of consideration to these things, and I hope very soon to be in a position to announce my decision about the future of this land.

Mr. T. Williams: On a point of order. May I ask you, Mr. Speaker, whether it is reasonable for an hon. Member to imply criticism of a member of an agricultural executive committee who is putting in a large amount of honorary work?

Mr. Roberts: May I say, Sir, in reply to that remark, that there is no criticism involved?

Mr. Speaker: I do not think it is necessary to accept it as criticism.

Myxomatosis

Mr. Morley: asked the Minister of Agriculture if he will make a statement on his policy with regard to the spread of myxomatosis among rabbits in this country.

Mr. Dudley Williams: asked the Minister of Agriculture what evidence he now has that myxomatosis is being deliberately spread in the West Country.

Dr. King: asked the Minister of Agriculture whether he will now introduce legislation to make the wilful spreading of myxomatosis illegal.

Mr. Amory: Myxomatosis is now present in all counties in England and Wales but one, and in 28 counties in Scotland. I have read reports about the deliberate spreading of this disease by individuals, but I have no direct evidence of this having been done in particular cases.
The Myxomatosis Advisory Committee considered at a meeting yesterday


whether legislation should be introduced to make the wilful spreading of myxomatosis a punishable offence. While reaffirming their view that no attempt should be made to assist the spread of myxomatosis or to introduce it into unaffected areas of the country, the Committee unanimously recommended that, having regard to the course the disease had taken and might be expected to take in the future, no good purpose would be achieved at present by making it an offence for any person to take steps to spread the disease.

Mr. Morley: In view of the horrible nature of this disease, could the Minister not suggest an alternative method of getting rid of the rabbits?

Mr. Amory: I agree with the hon. Member that this is a most unpleasant disease. Many of us who have seen rabbits affected by it will feel that, but this is not as simple as it looks. Even considering the humanitarian aspect of it in complete isolation, which, I agree, is very important, I still feel that the present course which has been followed is probably the best.

Sir T. Moore: Has my right hon. Friend any information to confirm the reports that this beastly disease is now affecting other animals?

Mr. Amory: No. I should like to assure my hon. Friend that the only other animal which might be affected, and about which we have evidence, is the hare. All our evidence shows that the disease does not affect any other animal.

Mr. Woodburn: Is the right hon. Gentleman aware that there is considerable apprehension among people who buy, or used to buy, rabbits for food? Could we have a scientific declaration on the matter, about whether it is possible for any of the rabbits affected by the disease to reach the market as food?

Mr. Amory: That is an important aspect of the matter, and I shall gladly consider the point the right hon. Gentleman has made.

Dr. King: Is the Minister aware that some of the farmers who were in favour of the spreading of this disease before it came in have changed their minds, now

that they have seen the horrible cruelty it inflicts, and that public opinion is outraged, not by the destruction of rabbits, but by the cruel destruction of rabbits? Will he not, in spite of the Committee's report, do something to make the wilful spreading of the disease illegal, and to put out of their misery rabbits which are suffering a lingering death?

Mr. Amory: I know that many different views are held about the right course to pursue in the future. We may have an opportunity to discuss this question on the Pests Bill, which will shortly come before the House.

Mr. Hayman: asked the Minister of Agriculture whether he will make a statement on the incidence of myxomatosis in Cornwall.

Mr. Amory: Since the first outbreak of myxomatosis in wild rabbits in Cornwall was confirmed on 11th May this year the disease has spread to about two-thirds of the county.

Mr. Hayman: Is the Minister aware that local authorities in Cornwall have had a heavy responsibility in dealing with dead and dying rabbits on the highways and by-ways, and that there is widespread concern at the fact that it has been publicly admitted by some people that they have deliberately spread this disease? Is he aware that public opinion now would favour making that an offence?

Mr. Amory: In the parts of the county where the disease has been rife I think it has resulted in the almost entire elimination of rabbits. I hope that as far as those parts of Cornwall are concerned, at least, the worst is now over.

Mr. Hale: Is not the right hon. Gentleman aware that the law relating to cruelty to domestic animals applies to wild animals when they are in captivity, and that the circumstances in which, according to all the accounts, this disease is being deliberately spread, mean that the law is being permitted to be used for cruelty to wild animals in captivity, since they are taken from, say. Birmingham to North Wales, or some other distant place, while suffering from this horrible disease in order that it may be spread more widely?

Gin Trap (Alternative)

Captain Pilkington: asked the Minister of Agriculture whether an adequate alternative to the gin trap has yet been found.

Mr. Amory: The Humane Traps Advisory Committee has examined a number of traps, and the more promising of these will be tested during the next few months. It would be premature to expect the Committee to express a considered opinion as to the merits of these traps at present.

Attested Cattle Purchasers (Protection)

Mr. Hayman: asked the Minister of Agriculture what steps he proposes to take to protect more fully purchasers of attested cattle, in view of a defect in the present methods revealed in correspondence which has passed between the Parliamentary Secretary and the hon. Member for Falmouth and Camborne.

Mr. Amory: I am considering whether any changes can usefully be made in the administration of the Attested Herds Scheme. The main responsibility must, however, rest with the purchasers to see that they obtain attested cattle only from reputable sources and that all animals purchased are accompanied by the official permit identifying the animal. I am taking steps to impress on farmers the importance of this.

Mr. Hayman: While thanking the Minister for that reply, may I draw his attention to the fact that the correspondence to which I have referred in my Question indicates possible loopholes for sharp practice by cattle dealers? Will he, therefore, do all he can to protect the buyers of attested cattle?

Mr. Amory: I realise that there are possible loopholes for sharp practice. I am looking into this, and I am grateful to the hon. Gentleman for having raised the matter with me.

Oral Answers to Questions — NATIONAL SERVICE

Agricultural Contractors' Employees (Deferment)

Lieut.-Colonel Bromley-Davenport: asked the Minister of Labour whether he will consider amending the regulations

governing the call-up of National Service men so that employees of agricultural contractors can be included among the farm workers who are eligible for consideration for deferment on agricultural grounds, in view of the fact that their work is concentrated on cultivating and improving the land.

The Minister of Labour and National Service (Sir Walter Monckton): This proposal has already been considered and found impracticable, as I explained in reply to the hon. Member for Gloucestershire, West (Mr. Philips Price) on 23rd July, 1953. The deferment arrangements in respect of agricultural workers are based on the contribution made by the particular worker to the production of food at an individual farm, and it would be impossible to apply this principle to men working for agricultural contractors.

Personal Case

Mr. Edward Evans: asked the Minister of Labour why it is not possible to defer the call-up of Mr. M. C. Meadows, Beccles, particulars of whom has been sent to him by the hon. Member for Lowestoft; whether he is aware that his employer has already two sons serving in Her Majesty's Forces; that the deferment is asked for only until one of these can be returned to his former employment; and that the call-up immediately of this man will inflict hardship on his firm, it having been found impossible to replace this man who, according to the custom of the trade, is still an apprentice.

Sir W. Monckton: My hon. Friend the Parliamentary Secretary has written to the hon. Member setting out the circumstances in which Mr. Meadows' deferment can be continued for a further 12 months.

Mr. Evans: While thanking the Minister for his co-operation in this matter, may I ask whether it does not disclose an undesirable position in his Department, since the age of this boy on leaving school was not known to the authorities, and that the conditions of apprenticeship in his trade were excluded by the Department despite the evidence produced to the Department by the employer and by myself.

Sir W. Monckton: As I understand the facts, both the applicant and the employer made a mistake about the date of the


commencement of employment, and that misled the Department. I am sure that the mistake was not deliberate, because it was not in their interests.

Oral Answers to Questions — HOME DEPARTMENT

Moneylenders, Sheffield (Interest Rates)

Mr. P. Roberts: asked the Secretary of State for the Home Department whether he will institute a special inquiry into the practices of moneylenders and collecting agents in the Sheffield area in order to see what steps are necessary to protect the unwary from paying extortionate rates of interest.

The Secretary of State for the Home Department and Minister for Welsh Affairs (Major Lloyd George): The Chief Constable of Sheffield informs me that he has received no recent complaints about licensed moneylenders in the city. I am aware of a recent case in which a collecting agent was convicted at the City Magistrates' Court on charges of fraudulent conversion, and while I see no reason to think that any special inquiry is called for, my hon. Friend's Question will, no doubt, serve to call attention to the dangers involved in borrowing money from unlicensed moneylenders.

Goods Vehicles (Speed Limit Enforcement)

Lieut.-Colonel Bromley-Davenport: asked the Secretary of State for the Home Department whether, in view of the report of the Road Research Laboratory that 95 per cent. of heavy goods vehicles exceed 20 miles per hour and about 65·70 per cent. exceed 25 miles per hour, he is satisfied that the police are unable, under present circumstances, to find an effective way of enforcing the 20 miles per hour speed limit for goods vehicles over three tons; and what action he proposes to take.

Major Lloyd George: In 1953, the police in England and Wales took proceedings in 20,293 cases of exceeding the speed limit by goods vehicles of all classes and issued nearly 2,000 written warnings. It is the responsibility of the police to enforce the law as best they can with the resources available to them, and I have no authority to give them any directions on the matter.

Lieut.-Colonel Bromley-Davenport: In spite of all these prosecutions, what is the use in having a law that cannot really be enforced? Is my right hon. and gallant Friend aware that chief constables and the police feel very strongly that if they were allowed to take the ridiculous police signs off the tops of their cars, and could go about in plain clothes, they could not only enforce the law—[HON. MEMBERS: "Oh."]—they could not only enforce the law, but could also decrease the awful accidents on the roads and save lives?

Major Lloyd George: I can only refer again to the fact that it is the responsibility of the police to enforce the law. I have no authority to direct them how to do it.

Children's Comics

Mr. Rankin: asked the Secretary of State for the Home Department if his attention has been directed to the nature of the contents of the American children's comics which are now being sold in this country; if he is aware that these periodicals have a demoralising effect on the minds of children, because they help to spread illiteracy and encourage sadistic practices; and if he will now take the necessary steps to prevent their circulation among children in the interests of sound education.

Dr. Stross: asked the Secretary of State for the Home Department whether he will take steps to forbid the printing of children's comics from imported plates.

Mr. Janner: asked the Secretary of State for the Home Department what representations he has received in the last few months, and from whom, expressing concern at the continued publication of horror comics; and whether he will consider further legislation to control their publication or importation, in view of the anxiety of teachers and parents about the effects of these publications on the young.

Mr. Orbach: asked the Secretary of State for the Home Department whether his attention has been drawn to the harm done to children by the distribution and publication of horrific comics; and, in view of the general condemnation, if he is now prepared to take steps to bring to an end the distribution of these papers.

Major Lloyd George: I am aware of the public concern about this matter, to which I am giving very careful consideration.

Mr. Rankin: Is the Minister aware of the widespread condemnation of this type of children's periodical? When he looks into the matter will he consider whether, in view of the vicious nature of these products, their entry should be banned entirely from this country? If that is quite impossible, will he try to find a definition of the word "obscenity" which will bring them within the compass of the law?

Major Lloyd George: The hon. Member will appreciate, I think, that the definition required in the latter part of his question is not an easy matter. Nor is it an easy matter to differentiate between what is objectionable and what is not objectionable. While some of these publications are certainly better not read by children in this country, others are quite unobjectionable, and the difficulty, therefore, is to decide between the two. But I am looking into the matter very carefully and I will do all I can.

Dr. Stross: Will the Minister bear in mind that newsagents throughout the country, and certainly all of them in North Staffordshire who wrote to my colleague and myself the other day, are very anxious that he should take some action, because they do not want to handle this rather beastly material? They look to him to give them assistance.

Major Lloyd George: I am sure that the hon. Member appreciates that they also have some responsibility in the matter. If they feel that they do not want to handle the material, I should have thought that the best thing was for them not to handle it. There is also the question of the responsibility of parents and teachers. Regardless of all that, however, I am looking at the matter and, while I know the difficulties, I will do my best to cope with them.

Mr. Janner: Would the Minister be good enough to answer the first part of my Question? As this matter has been brought to the notice of his Department for a very long time, will he see that something practical is done and not allow it to continue for a further long period?

Major Lloyd George: I have done my best to assure the House that I will do everything I can. The only representation of which I know personally is that I should receive a deputation in the near future from the Archbishop of Canterbury, as Chairman of the Church of England Council for Education. I shall receive that deputation very shortly.

Mr. Gaitskell: Is the right hon. and gallant Gentleman aware that there is widespread concern about this matter throughout the country? Will he give it urgent consideration? We appreciate that he has not yet had very much time to consider it but perhaps he could present a report to the House before Christmas.

Major Lloyd George: I will certainly do my best. I share the concern of everyone in the House and the country. I have seen some of these things, as have other hon. Members, and there is no doubt at all that some action is necessary.

Mr. Fell: Is my right hon. and gallant Friend aware that action has already been taken in America which should in a short time lead to the material no longer being available in this country for these horror comics? Is he also aware of the rather peculiar coincidence of this present campaign against horror comics —the coincidence of this campaign with the launching of two new children's newspapers in this country by the "Daily Express" and the "Daily Mirror"?

Civil Defence Column, Epsom

Mr. Albu: asked the Secretary of State for the Home Department if any decision has yet been made as to the future of the Civil Defence mobile column at Epsom.

Major Lloyd George: I would refer the hon. Member to the statement made by my predecessor on this subject in the course of the debate on civil defence last July.

Mr. Albu: Do I understand from that reply that the mobile column at present in being in Epsom is to continue in the coming year? As far as I understand it, no statement about that was made in the course of debate.

Major Lloyd George: If the hon. Member will look at the OFFICIAL REPORT for 5th July he will see a full statement on the future of the column.

Obscene Literature (Legislation)

Mr. K. Robinson: asked the Secretary of State for the Home Department if he will introduce legislation to amend the law relating to obscenity in literature.

Major Lloyd George: The hon. Member will appreciate that this is not an easy matter on which to legislate, but I propose to look into the problem as soon as possible.

Mr. Robinson: While thanking the Minister for that reply, may I ask him whether he is aware that there is widespread concern among the public about a law which permits magistrates to order the destruction of Boccaccio's "Decameron," which has circulated freely for 600 years, which brings reputable publishers into disrepute, and allows profiteers in pornography to escape scot free?

Major Lloyd George: On the whole, on this very difficult question, the law has operated fairly well, with occasional exceptions. There are one or two defects which certainly ought to be looked into and that is what I propose to do as soon as possible.

Mr. Turner-Samuels: Does not the Minister agree that the police force are under a very great handicap in this work? Is it not the case that before they can take any action at all they first have to buy a book which they suspect and then have to ask the magistrates for a search warrant; and by the time they come to search the shop the objectionable books have disappeared?

Major Lloyd George: I told the House that there were one or two defects in the law. That is probably one of them. There are, however, other aspects which concern authors and publishers as well, and that is why I think the matter should be looked into.

Mr. Roy Jenkins: Will the Home Secretary not agree that at the very least there is urgent need for clarification of the law here since it is impossible to escape the conclusion that decisions

depend to an unusual and undesirable extent upon the views of the persons trying particular cases?

NUCLEAR WEAPONS (SOVIET EXPERIMENTS)

Mr. Steward: asked the Prime Minister whether he is in a position to make a statement on the known course and scope of Soviet Russian experiments in the field of atomic energy and the hydrogen bomb.

The Prime Minister (Sir Winston Churchill): As I have said before, it would not be in the public interest to disclose the extent of our information relating to Russian nuclear weapon experiments. The subject continues to occupy our unceasing attention.

Mr. Anthony Greenwood: Would the right hon. Gentleman say how many more months are to elapse before he takes the "immediate initiative" in calling for a high-power conference on this subject?

The Prime Minister: I am not able to impose any time limit on these prospects or proceedings.

ANGLO-RUSSIAN RELATIONS

Mr. Hector Hughes: asked the Prime Minister what steps he has taken since last June for the purpose of arranging an interview between himself and Mr. Malenkov of the Union of Soviet Socialist Republics; and what progress he has made on these lines.

The Prime Minister: As I told the hon. Member for Dartford (Mr. Dodds) on the 19th of this month, I have in no way receded from my expression of willingness to meet Mr. Malenkov at some agreed place and rendezvous if the right time and occasion are found. I have nothing to add to that reply today.

Mr. Hughes: Does the Prime Minister not realise that the British people expect him, as he is Prime Minister for the time being, to follow the lead which has been given in this matter by the Leader of the Opposition?

The Prime Minister: There are at least two parties in this country and I do not think that the British people as a whole


consider me absolutely obligated in every respect to follow the lead of the right hon. Gentleman the Leader of the Opposition.

Mr. Osborne: In view of the fact that Mr. Malenkov is very much younger than the Prime Minister, would it not be a good idea if he came here?

Mr. S. Silverman: While it is obviously true that there is more than one party in this country, will the right hon. Gentleman bear in mind that all parties in the House gave unanimous support to the Motion moved by my right hon. Friend the Leader of the Opposition which called for initiative forthwith by the Government to bring about discussions in relation to this matter? In view of that, will he not reconsider it?

The Prime Minister: The Resolution has never been absent from my mind. It was carried unanimously by the House, but that was on the understanding that time, place and circumstances would have to be considered.

PHYSICAL CULTURE (STATE LEADERSHIP)

Mr. Dodds: asked the Prime Minister if he is aware of the great strides made in many European countries in the development of physical culture under the leadership of the State; and, in view of the benefits that a nation can derive from such a policy, if he will consider appointing a Minister of Physical Education; and in what way Her Majesty's Government propose to give a lead to increase the facilities for physical fitness in this country.

The Prime Minister: It is the declared policy of Her Majesty's Government to encourage the development of sport and physical fitness. I do not think, however, that the appointment of an additional Minister, presumably with a Department, is either necessary or desirable. The habit of multiplying ministerial offices is not one to be encouraged.

Mr. Dodds: Does not the right hon. Gentleman appreciate that it is about time that we had greater emphasis from the Government of the day on the need for physical exercises instead of depending on the present fashion of taking

medicine and pills? Since the Government are out to encourage physical fitness, would the right hon. Gentleman say what money they are prepared to give to these organisations which are struggling with their present limited funds to do this job?

The Prime Minister: That appears to be too complicated a question for me to provide an answer without having the opportunity of consulting in the usual quarters.

Mr. Dodds: In view of the need to enable the Prime Minister to understand the matter, I beg to give notice that I will raise it on the Adjournment next Thursday night.

BUSINESS OF THE HOUSE

Mr. Attlee: May I ask the Leader of the House if he will state the business for next week?

The Lord Privy Seal (Mr. Harry Crookshank): Yes, Sir. The business for next week will be as follows:
MONDAY, 25TH OCTOBER—Debate on the Report and Accounts of the National Coal Board for 1953.
TUESDAY, 26TH OCTOBER, AND WEDNESDAY, 27TH OCTOBER—Feed and Drugs Amendment Bill [Lords]—Committee.
Motions to approve: Draft Pneumoconiosis and Byssinosis Benefit Amendment Scheme.
Draft Industrial Diseases (Miscellaneous) Benefit Scheme.
THURSDAY, 28TH OCTOBER—Second Reading: Civil Defence (Armed Forces) Bill [Lords]; and Committee, and, if agreeable to the House, remaining stages of the Overseas Resources Development Bill.
FRIDAY, 29TH OCTOBER—Second Reading: National Gallery and Tate Gallery Bill [Lords].
It may be convenient for me to inform the House that the consideration of outstanding Government business in both Houses and debates on foreign affairs and other subjects will probably occupy our attention for five weeks or so.
It is expected that Prorogation will take place during the week beginning Monday, 22nd November, and that the new Session will be opened by Her Majesty the Queen on Tuesday, 30th November. I shall make a further statement later.

Mr. Woodburn: Can the right hon. Gentleman state what is the position with regard to the Teachers' Superannuation Bill, in respect of which there are on the Order Paper Amendments for rejection in the name of my right hon. Friend the Leader of the Opposition and myself?

Mr. Crookshank: Yes, Sir. I have noticed these Amendments, but the Bill will not be taken next week.

Mr. L. M. Lever: Will the Leader of the House provide an opportunity, at a very early date, of debating the Motion in the name of the hon. Member for Brierley Hill (Mr. Simmons) and subscribed to by 130 Members of the House, relating to the 1914–18 war disability pensioners? These are the claims of B.L.E.S.M.A. on behalf of this very deserving section of the community.

Mr. Crookshank: I cannot make any promise about any debates at present. All that I can say is that, as we have a lot of legislation to get through, the sooner we get through it the more days will become available for general debate.

Mr. Hale: Will time be given before the end of this Session to discuss the Report of the Royal Commission on Capital Punishment, which has now been in our hands for a considerable time and upon which the Government have not yet apparently made up their minds?

Mr. Crookshank: I think that I can say to the hon. Gentleman, as I said to the hon. Member for Ardwick (Mr. L. M. Lever) that the matter is engaging the immediate attention of my right hon. and gallant Friend.

Mr. Paget: Surely this is a Committee which has been set up by the whole House. Its report has been in our hands for a long time and there ought to be a debate on it this Session. Can the right hon. Gentleman give us an assurance that it will be debated this Session?

Mr. Crookshank: I do not think I can give an assurance quite in that form at present. It is certainly one of the matters which I have in mind for early discussion when opportunity arises.

FEDERATION OF RHODESIA AND NYASALAND (GIFT OF MACE)

Mr. Walter Elliot: Mr. Speaker, on 27th and 30th July this year, this House, by Resolution, ordered that certain of its Members should go in person to the Federal Assembly of Rhodesia and Nyasaland, and there hand over as a gift from this Commons House of Parliament, the Mace, which, by direction of Her Majesty the Queen, was to be presented to that Assembly.
I have to report, Sir, on behalf of the delegation thus appointed, that on 10th September we attended the sitting of the Federal Assembly in their Chamber at Salisbury, Southern Rhodesia, and that the Mace was handed over by us, and received on behalf of the Assembly by their Speaker, Mr. Ian Wilson.
Our delegation consisted of the right hon. James Griffiths, the Member for Llanelly; the right hon. Arthur Henderson, the Member for Rowley Regis and Tipton; Mr. F. M. Bennett, the Member for Reading, North; Mr. Bernard Braine, the Member for '.Billericay; Mr. G. R. Chetwynd, the Member for Stockton-on-Tees; Mr. Edward Heath, the Member for Bexley; Mr. Derek Walker-Smith, the Member for Hertford; and Mrs. Eirene White, the Member for Flint, East; and myself. We also had the advantage of the services of Mr. T. G. B. Cocks, one of the Officers of this House, whose parliamentary knowledge and experience was of the greatest service both to us and to the Members and officers of the Federal Assembly.
The following Motion was moved by Sir Godfrey Huggins, Prime Minister, and supported by Mr. J. R. Dendy Young, Confederate Member for Sebakwe:
We, the Members of the Federal Assembly of the Federation of Rhodesia and Nyasaland in Parliament assembled, express our thanks to the Commons House of Parliament of Great Britain and Northern Ireland for the Mace which, by direction of Her Majesty the Queen, it has presented to this House. We accept this generous gift as a token of the friendship and good will of the House of


Commons towards the Federal Assembly and all the peoples of the Federation. This Mace will ever serve to remind us of the great traditions of parliamentary government which we, as Members of the British Commonwealth, have inherited from the Parliament of the United Kingdom.

(Signed) IAN WILSON,

Speaker,

as passed by the Federal Assembly.

(Signed) G. E. WELLS,

Clerk of the House."

The Resolution was passed without any dissentient, and I was asked to convey it to this House. I hope, Mr. Speaker, that in accordance with precedent you will give instructions for this Resolution to appear in the Journals of our House.

This is only the third time that a delegation has gone from this House to a sister Assembly bringing gifts. It is the first time that a woman Member has formed part of such a delegation. Mr. Speaker, we, the delegation, would wish to express our thanks for the courtesy and hospitality so wholeheartedly extended to us during our visit to the Federation. The cordial terms of the Resolution bear testimony to the appreciation felt by their Assembly towards the act of this House. We, in our turn, would wish to place on record our sense of the courage and resolution with which this new community is embarking upon a most difficult enterprise, that of bringing to birth in its territories the multi-racial State.

In these great lands north of the Limpopo River they are undertaking a new task, with few precedents to guide them. This House will, I am sure, give its sympathy and support to this newborn Legislature and the peoples which it represents, in the steps towards a liberal and progressive system they have affirmed their intention to undertake.

Mr. Speaker: I will direct that the Resolution be entered in the Journals of the House.

HOUSING (REVIEW OF CONTRIBUTIONS)

3.38 p.m.

The Minister of Housing and Local Government (Mr. Duncan Sandys): I beg to move,
That the Draft Housing (Review of Contributions) Order, 1954, a copy of which was laid before this House on 12th July, be approved.
The House will, I feel, have some sympathy with me in following at the Ministry of Housing and Local Government my right hon. Friend who, by his brilliant and successful handling of housing policy, has, I believe, won the respect of hon. Members in all parts of this House and the gratitude of millions outside it, As Minister of Works in the war-time Coalition Government, and subsequently in the so-called Care-taker Government, I was actively concerned with the launching of the temporary housing programme—until my tenure of office was, to me, somewhat abruptly and unexpectedly ended in July, 1945. I am therefore particularly glad to find myself once again actively concerned with this great human problem of housing.

Mr. George Chetwynd: For about the same length of time.

Mr. Sandys: This Order has been before the House since 12th July, and we are now asking that it be approved. The Order reduces the subsidy on local authority houses which are completed after 31st March next. As the House knows, this rate of subsidy is reviewed once a year. The reductions proposed in this Order are the outcome of the review made last June. As my predecessor explained in a White Paper, these reductions are justified by the change in conditions which has taken place since the present rate of subsidy was fixed in 1952.
The principles on which the subsidy is calculated are now well established, and I think that they are pretty well known to hon. Members. The subsidy is determined in the light of four main factors. The first is the capital cost of building; the second is the interest charges for its amortisation over a period of 60 years; the third is the cost of repairs and management; and the fourth is what is known as the notional rent, that is to say, the amount of rent which a local authority


can reasonably charge its tenants having regard to the current level of earnings.
The proposals contained in this Order must be viewed against the background of the policy which has been pursued by Governments of both parties since the end of the war. By the Act of 1946 the late Government fixed the standard Exchequer subsidy at £16 10s. In arriving at that figure, they estimated that the average cost of a standard three-bedroom house of 950 square feet was £1,100. The annual cost of repairs and management was then reckoned to be £7 8s. and the notional weekly rent was estimated to be 10s.
In the years which followed, the cost of building materials and labour went up continuously, and with it, of course, the cost of house building. To meet these increased costs the late Government might well have increased the subsidy, but instead—and I think quite properly—they decided to assume an increase in the notional rent while keeping the subsidies unchanged. The figure which they assumed for rent was raised successively from 10s. in 1946 to 16s. in 1951. They justified these increases in the assumed notional rent on the ground that they did no more than reflect the increase which had taken place in the level of earnings.
With the change of Government at the end of 1951, the Bank rate was put up, and in consequence the interest rate charged to local authorities by the Public Works Loan Board was raised from 3 per cent. to 3¾ per cent. and a few months afterwards to 4¼ per cent. This had the effect of substantially increasing the cost of local authority house building—which, I remember, was pointed out by the right hon. Gentleman who was Financial Secretary to the Treasury at the time—and this rise in the cost of house building—

Mr. Charles Pannell: The right hon. Gentleman has made an error. My right hon. Friend the Member for Battersea, North (Mr. Jay) was speaking from the Opposition benches. The Financial Secretary at that time was the present Minister of Transport.

Mr. Sandys: The hon. Member is quite right. I meant the previous Financial Secretary and I referred to him in that way because I could not remember the name of his constituency.
This substantial increase in the cost of house building made it necessary to review the whole basis of the housing subsidy. As a result of this review, which took place at the end of 1951 and the beginning of 1952, the standard Exchequer subsidy was raised from £16 10s. to £26 14s., and the various special subsidies were raised proportionately. That was done by the Housing Act of 1952. In introducing the Bill, my predecessor explained in some detail how the revised figure of £26 14s. had been arrived at.
It was estimated that during the six years from 1946 to 1952 the capital cost per house had gone up by £475. The cost of repairs and management was then estimated to be £12, which represented an increase of £4 12s. over the 1946 figure. Following the same principles as had been adopted by the previous Government, the notional rent was raised from 16s. to 18s. to reflect the general increase in earnings. This revised rate of subsidy based on these figures was fixed in agreement with the local authorities, and was, I think, generally accepted as fair and reasonable in the circumstances which existed in 1952.
At the annual review in June, 1953, no alteration was made, but since then a major change has taken place in one of the main factors of the subsidy calculation, namely, in the rate of interest payable on loans from the Public Works Loan Board. This has gone down from 4¼ per cent. to 3¾ per cent. If all the other factors in the subsidy calculation had remained unchanged since 1952, this reduction of ½ per cent. in the interest rate would have made it possible to reduce the Exchequer subsidy from £26 10s. to £21 18s. However, the other factors have not remained entirely unchanged. Wages in the building industry have continued to go up, but to a large extent this has been offset by some drop in the prices of building materials, and also, I am glad to say, by some increase in productivity due to a number of reasons, and in part, I am sure, to the freer flow of building materials.

Mr. Leslie Hale: There has been another change. It is in the standards of housing which now vary very considerably. Will the right


hon. Gentleman explain how he estimates the capital cost today? Does he take all the houses built and divide the capital cost? I am told that in Oldham the figure he presumes is £1,560, but that the actual cost is £1,683 per house.

Mr. Sandys: Is the hon. Member talking about the size of houses?

Mr. Hale: I am talking about the capital cost. Is it being based on the smaller house or the average house?

Mr. Sandys: It is based upon the average kind of house that is being built by local authorities, and it is true that the average size of that house is somewhat smaller than it was some years ago. I think that is very satisfactory. The plans have been improved in many ways, with the result that it is possible to get, for rather smaller floor space, equally satisfactory amenities. In any case, I would point out to the hon. Member that the decision as to what kind of houses they build rests with local authorities. The right hon. Member for Bishop Auckland (Mr. Dalton) conceived the idea of the house which was subsequently delivered and christened by my right hon. Friend—perhaps with his rather more popular touch—the "People's House." The ideas embodied in that type of house, originally put forward by the last Government, are now being adopted to an ever greater extent by local authorities, and the subsidy is based upon the type of house which local authorities in general have decided to build.

Mr. C. W. Gibson: This is the crux of the whole matter. Is it not a fact that the assumed capital cost is a purely notional figure, arrived at by persons in the Ministry of Housing and the Treasury, in a way which nobody in local Government has yet accepted? Is it not a fact that it is and has been, even under the previous Government, a notionally accepted cost of house building which in fact is a long way from the actual realities of the situation?

Mr. Sandys: The figures taken for the building of houses are based not upon some notion but upon an examination of the tender prices and actual costs throughout the country. The notional rent figure to which the hon. Member referred is, as the expression indicates, a notional rent. I hope that we need not

make this subject controversial beyond the differences of opinion that may exist upon the broad issues; there is no party issue involved in this aspect of the matter. What we have adopted is a long-standing practice—I hope that the hon. Member for Clapham (Mr. Gibson) will listen to me. I notice that he is in conversation with the hon. Member for Peckham (Mrs. Corbet).

Mr. Gibson: It is upon the same point.

Mr. Sandys: Then I shall leave the matter there. All I am saying is that the notional rent is a basic factor in the calculation of the housing subsidy and has been accepted as such by successive Governments. The increases which the previous Government made in the notional rent year after year were based upon the increase in average earnings as shown by official statistics, and we have adopted exactly the same principle. I am still talking now only about the principles which were adopted in the fixing of the 1952 subsidy.
Since then, as I have said, wages have gone up, but to some extent that has been offset by the drop in the price of certain building materials and by the very satisfactory increase in productivity. Balancing these factors one against the other, it is estimated that during the last two and a half years the cost of house building has risen by a little over 3½ per cent. The effect of this—and this may to some extent answer the hon. Member's point—is to increase the cost per house by about £58 above the 1952 figure. On the other hand, this slightly increased capital cost can now be amortised at an interest rate which is one-half per cent. lower than it was before. The net result is that the annual cost to the local authority has gone down by about £4.
The only other change which has been made in the factors governing the subsidy calculation is in respect of rent. I was talking just now about the notional rent in the 1952 subsidy calculation; now I come to the present subsidy calculation embodied in this Order. In reviewing the notional rent on this occasion, we have once again followed the same principles as those adopted by the late Government. The average earnings have continued to rise and the notional rent has been assumed to have risen by 1s. from 18s. to 19s. This 1s. increase in


the notional rent is less than the increase in earnings would warrant. In April last the statistics showed that the average weekly earnings had gone up by £1 11s. 8d. above the level upon which the last subsidy was based. This represents an increase of 19 per cent., which would justify an increase of 1s. 8d. in the notional rent, but, as I have said, we have assumed an increase of not more than 1s.
Based on these calculations, the Order provides for a standard Exchequer subsidy of a round figure of £22 1s. In this world of housing subsidies, round figures are figures which are divisible by three. That is why the odd shilling has been added. This figure of £22 1s. compares with £26 14s. at present, and £16 10s. in 1951.
I have explained in some detail what we are doing by this Order, but so that there shall be no misunderstanding I should like, in a few words, to draw attention to what we are not doing. First, we are not proposing any reduction in the three-to-one ratio between the Exchequer subsidy and the local authority contribution, although power to do so is given to the Government in the 1946 Act. Secondly, we are not assuming as great an increase in the notional rent as the increase in average earnings would warrant.

Mr. J. A. Sparks: What about the cost of living?

Mr. Sandys: Thirdly, we are not bringing into operation the subsidy reduction envisaged in this Order until the end of March, although the changed factors which justify it are already operating.
In moving the Second Reading of the Housing (Financial and Miscellaneous Provisions) Bill in 1946, the right hon. Member for Poplar (Mr. Key)—whom I am glad to see here today—expressed views with which I think Members in all parts of the House can agree. He said:
…high subsidies must not be an incentive to maintaining high costs, and, since we are determined that high costs shall be temporary, high subsidies must be temporary too.
He went on to say:
For this reason I wish to make it quite clear that the subsidies now proposed … are maxima, and it is the intention of the Government that they shall be reduced at the earliest

opportunity."—[OFFICIAL, REPORT, 6th March, 1946; Vol. 420, cc. 342–3.]
It must, I think, be a matter for satisfaction by hon. Members in all quarters that now, for the first time, it has become possible to make some reduction in housing subsidies, while at the same time scrupulously adhering to the principles which have governed the policy of Governments of both parties on this question since the war.

4.1 p.m.

Mr. Hugh Dalton: We now see this important Government Department under new management, and this causes speculation as to how the new management will compare with the old. We shall watch the position with interest and attention. We shall, as we did with the right hon. Gentleman's predecessor, give him our support when he is proceeding along the right lines, but we shall equally seek to guide and stimulate his steps when we think that a quicker pace or an altered direction would be in the public interest.
With regard to the proposals which the right hon. Gentleman has brought before us, I am inclined to think that since he has only just come to his present office, and since he has not yet had an opportunity of consulting the local authorities it would be advisable that he should do so before pressing these proposals through the House. They were put forward by his predecessor some considerable time ago, and in July discussions took place, I am told, between the representatives of the local authorities and the present Minister of Defence. But the local authorities were not wholly satisfied with those discussions, and they suggested that there should be further consideration and some postponement of this Order. I think that the A.M.C., in particular, pressed for that.
Now that we have a new Minister who is going to confront the housing problem afresh, I should have thought it would be better for him to get into consultation now with the local authorities to see whether he can produce, not only on this point but on other matters relating to housing, a new programme—not necessarily a revolutionary change—based upon up-to-date considerations and statistics, and that today we should not be required to accept this Order. It would cost him nothing. In any case, he is not


proposing to operate this except on houses completed as from 1st April next, and therefore there is plenty of time. That is my suggestion which I hope that the new Parliamentary Secretary will be authorised to accept if and when he speaks later.

Mr. Harmar Nicholls: Before the right hon. Gentleman leaves that point, I think it would help the debate later on if he would repeat at once that the calculations which have brought about the suggested reduction are made upon precisely the same premises and upon the same basis as were the calculations, when the right hon. Gentleman was the Minister responsible, that brought about the increases, and that the same argument which justified an increase at that time now justifies a decrease.

Mr. Dalton: If I may be allowed to continue my argument, perhaps I shall throw up some of the thoughts which the hon. Gentleman wishes, but let me continue in my own sequence.
I was coming to the interest rates, which are one of the important points in the argument. We have been told that the Public Works Loan Board interest rate has been reduced from 4¼ per cent. in February, 1952, to 3¾ per cent. at the present time. That is quite true. The rate of 4¼ per cent. was a very high rate —the highest we have had for a long time.
When I was responsible for these things, the local authorities borrowed at 2½ per cent., and, on the whole, those were good days from the point of view of housing costs. If local authorities were asked which they preferred, the rate which I gave or the rate which they are now getting, I know what their answer would be. The 4¼ per cent. was, for recent times, a very high rate, and it was high time that it should be reduced as from June, 1954.
I want to bring the argument up to date and to ask the right hon. Gentleman, first of all—and this is another reason why the matter needs a little further consideration—whether he thinks that the present rate of 3¾ per cent. is one that can be counted upon to remain stable for any length of time in the future. Perhaps he has already had discussions with the Chancellor of the Exchequer about this.
Supposing that his figures are all perfectly correct, but that then, very soon, the rate is put up again. Where, then, do we stand? The right hon. Gentleman is looking a little puzzled. Supposing that the rate of 3¾ per cent. is put up to 4, 4¾ or 4½ per cent. in the near future, where, then, do we stand in regard to the housing subsidy? Has the right hon. Gentleman got an assurance from the Chancellor of the Exchequer either that the Public Works Loan Board rate will not be put up again in the near future, or that, if it is, the right hon. Gentleman will then come forward with another Order raising the subsidy again so as to take account of any future increase in the rate?

Mr. Sandys: The right hon. Gentleman said just now that I was looking a little puzzled. He has held the same office and knows the position. As I understand it, the interest rate at which the loan is contracted continues for 60 years. That is the period for which the loan is amortised. Therefore, if there is an increase in the rate, it will not in any way affect the position, because in that case as on the previous occasion, the subsidy position would have to be considered. It is now being reduced because of a change in the interest rate. On the last occasion, it was increased because of an increase in the interest rate. The right hon. Gentleman can, of course, assume that that will be the position.

Mr. Dalton: I think that we are quite clear about the incidence of the change in the subsidy, either up or down. It applies in the present case only to houses completed after a due date in the near future —to houses completed after 1st April next. It then runs for 60 years. That is the period of the amortisation.
The assurance for which I am asking the right hon. Gentleman is that, if the rate is put up again, the subsidy will not merely be considered. Can he give an assurance that if the subsidy is being reduced because the rate of interest has fallen, it will be put up again if the rate goes up? I do not think that the right hon. Gentleman has been able to give me that assurance.

Mr. Sandys: The position will be reviewed once a year.

Mr. Dalton: It may be reviewed, but I am asking whether the adjustment will be made. Quite clearly this has a great


bearing on our attitude towards this proposal. It might well be that consideration might lead to saying, "We cannot for the moment readjust the subsidy." Some of us think, watching what went on, that the right hon. Gentleman's predecessor was, on the whole, very successful in his battles with the Treasury. Whether the right hon. Gentleman is going to be equally successful remains to be seen. Upon his influence with the Chancellor much in this field depends.
As to the possibility of the rate going up again, I was reading the speeches made last night at the Mansion House. We always look to these annual statements as pointers to the financial policy of the Government in the future. The Chancellor of the Exchequer, looking back to the previous annual occasion, recalled that he had then said that we had been steering a course between the primrose path and the wasteland; that is to say, between inflation and deflation. He added:
This year the primroses are a little bit nearer.
This is a very agreeable simile, but it certainly points towards the possibility of still dearer money, because it is an accepted proposition in orthodox financial circles, if one is threatened with a little inflation, that one should put up the rates of interest, and in the same way, when there is a deflationary situation one should put rates of interest down.
At the same banquet last night the Governor of the Bank of England said that the barometer was rather more towards inflation than towards deflation. I take this as an indication that there may be dearer money in the future. That is why my question is particularly relevant when I ask whether, if we are to have dearer money, we are to have bigger subsidies. Perhaps the spokesman of the Department will think about it before the end of this debate. A consideration which will weigh heavily with us is whether there will be an equal upward movement of subsidy, if the rate of interest goes up.
There are other costs in house building besides the rate of interest. I have checked the figures given by the Gird-wood Committee, which has made three Reports, the first in 1947, the second in 1949 and the third, I think, in 1952 or 1953. The figure that the Committee gave

for a traditional three-bedroom house was £1,400 in 1947, £1,515 in 1949 and, in their third Report two years ago, £1,690. I was asked by the hon. Member for Peterborough (Mr. H. Nicholls) whether I accepted all the figures given by the Minister today. I am not sure that I do. I should like to read HANSARD tomorrow and see how they all work out. I think that the Minister gave too low a cost as compared with the figures given by the Girdwood Committee.

Mr. Pannell: My memory is that a notional figure of £1,575 was based on the Girdwood Committee's Report but that there was a reduced figure on the assumption that somehow things would improve under the present Government.

Mr. Dalton: Perhaps we shall have more elucidation from the Parliamentary Secretary on these matters.
I must say a few words about the reference to me which is often made in connection with these new houses. What happened, when I held the office now held by the right hon. Gentleman, was that some ingenious architects called to see me—and I am always delighted to see architects—and showed me a number of new plans for building houses and asked whether I would prescribe these to the local authorities. I said, "No, I will not prescribe them, but I will certainly circulate them by way of information and suggestion." A number of these plans have been used, though not necessarily in the exact form in which they were circulated. They were of interest to many local authorities and in some cases they were adopted, but it is quite a mistake to father upon me any enforcement upon local authorities of smaller floor areas or smaller houses or lower ceilings or any other such device.
All I did was to indicate to the authorities that a number of architects had drawn up these different types of novel and interesting designs for building houses. I gave them a wide circulation and I believe a public exhibition of some of them was held. That was the total amount of my responsibility. Not only was I not responsible for the catchy title "People's House." which I gladly credit to the right hon. Gentleman's predecessor, but I did not bring pressure to bear on local authorities to reduce their housing standards. This is an interesting story which should be accurately recalled.
We should look carefully at this figure for the notional cost of building a traditional three-bedroom house. I think that it will be found that that cost is noticeably higher than the right hon. Gentleman indicated in his speech. I will not go into the figures now. A number of my hon. Friends no doubt will wish to say something in the light of their knowledge and of the first-hand experience of the local authorities of which they are members. We have many hon. Members on both sides of the House who have had local authority experience and I am anxious not to stand in the way of their contributions, but there is a wider aspect of this matter which is in the minds of many people at the present time to which I must refer.
Two articles have lately been published in "The Times," the first under the tendentious title, "The soaring cost of subsidies." They appeared on 28th and 29th September. They were designed to argue that subsidies were altogether too great and that steps should be taken to reduce the total amount of subsidies being paid out. They also sought to link up in one doctrine direct subsidy payments from public funds to local authorities—which we are discussing this afternoon—and what they called the subsidy from private landlords to their tenants, under rent control.
There is a school of thought, a type of opinion, which is seeking at this moment not only to reduce subsidies, as we are invited to do in this Order, but to do that as part of some general doctrine which would also get rid of rent control and give back to the landlords that which, according to these writers, is being taken from them and given to the tenants of privately-owned houses in the form of controlled rent. Therefore, some of us are a little suspicious of the larger thoughts which may lie behind this. We are not at all convinced that this may not be the thin end of the wedge to do away with the encouragement hitherto given by the previous Government and the right hon. Gentleman's predecessor to local authority house building on a large and increasing scale. We are wondering whether we are not going to see steps taken in a new direction, so that local authorities will be increasingly restricted in the future in their housing operations, which will be mainly focussed on slum clearance under the pronouncements

made by the right hon. Gentleman's predecessor, and linked up with that a general movement to get rid of rent controls in respect of privately-owned houses.
It would be well if this whole matter could be taken up again and looked at rather more broadly than the right hon. Gentleman has done this afternoon. He may wish to make a general statement soon about his intentions, and I should have thought that there should be further discussions with the local authorities to obtain their agreement either to the proposals in this Order or to alternative proposals. I hope that we shall soon obtain from him a more comprehensive statement.

4.20 p.m.

Mr. Harmar Nicholls: The right hon. Member for Bishop Auckland (Mr. Dalton) is one of the most adept Parliamentarians in this House. I think that is accepted on all sides. Therefore, it is quite clear that, if he found difficulty in discovering anything to criticise in this Order today, the Order must be a good one, because if there were a loophole by which he could criticise it, the right hon. Gentleman is the one who would find that loophole. I think his speech was a clear indication that there is nothing much to criticise in view of the past history of this Department.
Of course, hon. Members opposite will find it difficult to criticise the Order, because the decision announced by my right hon. Friend is based on the calculations hon. Members opposite set up. The calculations which now recommend that we reduce the subsidy by this amount are precisely the calculations and premises on which they said the subsidy should go up.

Mr. Pannell: The hon. Member is quite wrong in saying that it is the same basis. It may be remembered that when the Labour Government went out of office the rate was 3 per cent. and it went up to 3¾ per cent. It was as a result of the rate going up to 3¾ per cent. that the housing subsidies had to be put up to the present figure. The rate has not gone back to 3 per cent. but to 3¾ per cent. from 4 per cent.

Mr. Nicholls: Nor has the subsidy gone down to that extent. My right hon. Friend is not suggesting that the subsidy


should be reduced to the £16 10s. level, at which it stood when hon. Members opposite were in power. It is clear that if one is to be fair in examining this matter, if one wants to criticise anything one criticises the relationship between the Government, the local authority and the subsidies, but if one criticises that basis one is criticising the very basis or formula employed by the previous Government.

Mr. M. Turner-Samuels: Is that really so? It may very well be that the circumstances justify the present reduction; I do not concede that, but assuming it, what we want to know is whether, if adverse circumstances recur, the Government will give an assurance that they will raise the contribution with the same facility as they are now reducing it.

Mr. Nicholls: One step at a time. The hon. and learned Member for Gloucester (Mr. Turner-Samuels) has given all that my right hon. Friend could ask. He has said that this increase is justified as things are at the moment and has gone on to say, as his right hon. Friend did, that there may well be circumstances in the future which will call for different thinking. But he admits, as I am sure he must, that the reduction now is justified on the basis which his own Government brought into operation.
I think that any impartial reader of this debate will see that the Opposition is in difficulty in wanting to criticise the basis or formula for taking this decision, as it is the one which was used by the previous Government. The right hon. Member for Bishop Auckland, reinforced by his hon. and learned Friend, has gone into the future. I rather admire them for looking ahead; it is not one of their usual traits. They have said, "We admit that the decrease today is justified"—[HON. MEMBERS: "NO."]—Well, the hon. and learned Member said that quite plainly, and I think he was wise in saying it. He has come over to our benches now; that is what happens when hon. Members see the light. The admission is that, as things stand at present, the reduction is quite right.

Mr. Dalton: That is not what I said.

Mr. Nicholls: At the beginning of my speech I said it was what the right hon.

Member ought to have said, and I think I am reinforced by the fact that his hon. and learned Friend did in fact say it. I see the point which is raised. It is this: if the interest rate goes up in future, will the subsidies go up in keeping with the increased interest rate? I think the answer is that if everything else remains as it is, there would be a case in the future, if the interest rate goes up, for increasing the subsidy again; but if it can be shown that the interest rate has gone up and the cost of building has gone down because of more mechanisation, then even an increased interest may not justify a subsidy increase. I think that this reduction in cost may well mean a perpetual reduction in subsidy rates.
It would be very unfair to ask my right hon. Friend, or the Parliamentary Secretary, to say at this stage that if the interest rate goes up automatically the subsidy will go up. All they can say is that if the rate went up and none of these other things happened there would be a case which they might well think fit to put to the Treasury. That is the answer which the right hon. Member for Bishop Auckland knew that he would get. He only posed the question because he had not an argument to put in opposition to the figures contained in this Order.
On the question of the notional value, I think that the intervention of the hon. Member for Leeds, West (Mr. Pannell) was not fair. It rather suggested that the figure given by my right hon. Friend was a "phoney" one. The same basis of calculation which brought out the previous notional figure announced by his party was used for the figure which has come out today. It may be that they were worked out by precisely the same people. If the figure given today is a wrong one, again we would be saying that the very basis on which the previous Government based this scheme was a wrong one. I do not think that even by inference the hon. Member should suggest that some Minister or adviser to a Minister has deliberately set up a new basis without disclosing it to this House. I am making my speech on the basis that precisely the same calculation as settled the previous notional figure is the one which settled this notional figure and, in the absence of very real evidence to the contrary, the hon. Member ought to accept the same basis.

Mr. Pannell: The basis had to be altered in reference to the repairs allowance from £8 to £12, which was the mean figure between all local authorities in the country. I made a speech on that at the time.

Mr. Nicholls: I remember the hon. Member's speech very well. I remember him telling us that in some local authority areas the repairs were only £6 10s. and in others they were £14.

Mr. Pannell: From £12 to £16.

Mr. Nicholls: I well remember the speech. If the advice of the hon. Member was accepted and a more realistic figure was produced, that should be a matter to give him joy and not to call forth criticism. I do not think we ought to move any further in the inference that this notional figure was based on anything but precisely the same basis as was laid down by the previous Government.
The right hon. Member for Bishop Auckland was too modest. One of his great assets as a Minister was his foresight in recognising that these were better designs for houses which ought to be circulated to local authorities. I always admired him for pointing out that we were wasting material and labour in providing big houses when the overriding demand was for smaller houses. I admired him for the fact that as Minister he gave support to the new plan circulated under the title of the "People's House."
For mere reasons of party politics he conies here today and says that he did not prescribe the new plan, but merely circularised it to local authorities. Is he suggesting that he would use the power of his office to send anything to a local authority other than what he thought was good for the authority to follow? Is the right hon. Gentleman suggesting that he has used Her Majesty's Postmaster-General's deliveries of letters to send something to them other than something which was good?
Of course the fact is—and I admire him for it, although I can understand his wishing to retreat from it at this moment —that he knew at that time that here was a better design, that here was the plan of a house that could give better value for money, and he wanted to send it to the local authorities in the hope that they would follow it when giving

their future contracts. I am certain that that was what the right hon. Gentleman had in his mind, and I am sure, after seeing two or three years during which these plans have been in operation, that he was right. It is rather sad to see that one of his greatest triumphs has to be apologised for when he comes to the Dispatch Box today.

Mr. Dalton: The hon. Member is labouring the point at some length. The matter is exceedingly simple. It is often the case that a Minister, who has contact with outside bodies and is anxious to co-operate with them in their work, may send them circulars inviting their attention to this or that idea or to this or that suggestion, but it is quite a different thing to put pressure on them in order to get them to adopt it.
I will just say—and if the hon. Member does not further provoke me I shall not intervene further after this—that I know a number of local authority architects and I thought it would be interesting for them to see alternative plans which had been prepared by other architects. I did not wish to intervene between one architect and another. All these things cannot be run from Whitehall; one has to leave them to local authorities to decide.

Mr. Nicholls: I would describe that intervention as a laboured defence of a very good action.
I sat as a local councillor, indeed as the head of a local authority, during the year in which the right hon. Gentleman circularised us. I have no recollection that when he sent the new designs he sent a covering letter to the effect, "I merely send these for you to look at; I do not personally recommend them." I remember the right hon. Gentleman's new design coming along, and, whatever the covering letter was, I am certain that the inference was that it had his approval. I have no doubt that it had.
I am not suggesting that the right hon. Gentleman brought pressure to bear on local authorities about it; I am sure he was far too good a Minister to have done so. He would realise that the one way not to get local authorities to follow his guidance would be to try to press them to do so. I am sure that he was using


his subtle and effective tactics in first sowing the idea in their minds in the hope that later they would follow it and think that it was their own idea. One of the outstandingly successful points in the right hon. Gentleman's career was in accepting that design and circularising it, and I am sorry that he is now trying to apologise for it.
The final point which the right hon. Gentleman made was in connection with a reference in "The Times" to the soaring cost of subsidies. He went on from that to make once again a good old electioneering point—never lose a chance of making an electioneering point when an election has to come within two years. He tried to suggest that it is the object of the Tory Party to do away with the Rent Restrictions Acts—the old argument that "the Tories want to put up your rent." The truth is that the recent Act which the House passed proved that the Conservative Party, the Government today, intend to protect the small rent payer. There is no question at all of doing away with rent restriction, as was suggested by the right hon. Gentleman.
I should like to feel that what "The Times" had in mind, and what I should like my right hon. Friend and his Parliamentary Secretary to keep in their minds, was not that subsidies should be reduced in order to make it hard for ordinary working-class tenants but that we ought to encourage house purchase on every conceivable occasion because every time a person buys a house he does not require a subsidy. I have believed for a long time that between the person who builds a house for himself and the person who has to go into a house as a subsidised tenant, there is a middle group who, if they had some help at the beginning in purchasing would not be tenants but house owners. If such help were given, we should be achieving the objective which I think "The Times" had at the back of its mind of saving the nation money on subsidies.
My right hon. Friend is to be congratulated on having, as his first Measure to bring before the House in his new office, this particular Order which, from the speech we have just heard from the Opposition Front Bench, is obviously one which will be received with approbation on all sides of the House.

4.35 p.m.

Mr. Charles Pannell: The Minister deserves our sympathy in having to bring this matter of housing subsidies forward today. It is a matter of great complexity; and, of course, it has a certain impact upon our social life. The fact that the Minister is here today is a sign of the crisis in the affairs of the Government. What is really happening? The hon. Member for Peterborough (Mr. H. Nicholls) presses—I always give him credit for it—at the Tory Party conference for the building of 300,000 houses a year. The Minister of Housing and Local Government achieves the conference target and as a result he moves on to the Ministry of Defence.
In achieving the conference target he sinks the Minister of Education—[An HON. MEMBER: "Nonsense."] Oh, yes, because of the diversion of capital away from the educational programme which his housing achievement causes. Of course there is no way of kicking a lady upstairs to the House of Lords so she becomes a Dame Grand Cross of the British Empire. Today we have here as the Minister of Housing and Local Government the former Minister of Supply.
I wish to deal, if the hon. Member for Peterborough will allow me, with the question of the Minister's notional figure, which I think is £1,575. I say that that notional figure was arrived at by taking the latest Girdwood figure and adjusting the elements in the notional figure to it. I do not think I am twisting the facts in any way in saying that. I have gone into these figures at great length before and I have already mentioned the element of the repairs allowance in the notional figure. At all events, I am not trying to mislead the House.
The difficulty this afternoon—I say this with great deference and in no attempt to be patronising to the Minister—is that he has come rather new to this subject. Some of us have lived with the subject of this debate for rather a long time and there is no room for any smart tactics today. The history of this step lies in the fact that when we left office the interest rate was 3 per cent. It was put up to 3¾ per cent., and at the time I said that the increase of interest rates on local authority houses over a period of 60 years really meant, in the case of


a house built under those terms, an increase of 4s. 4d. per week. That figure was generally accepted at the time.
What we are now speaking about in our references to housing subsidies is something which affects the payments of rents by council tenants. Further than that, it was on the figure of 3¾ per cent. that the Minister agreed to confer with the local authorities in order to achieve the present housing subsidy figure. The interest rate has since risen to 4¼ per cent., but it was on the basis of 3¾ per cent. that it was proposed to increase the subsidy to the present figure of £26 14s. Therefore, the hon. Member for Peterborough says that, if the Government after a period of time reduce the interest charges, it is reasonable that they should reduce the subsidies—I think that is the hon. Member's point—if everything else is equal.
We have to address ourselves today to the question whether everything else is equal, when £1,575 is given as a notional figure representing the figure at which it is assumed a local authority will be able to build a house of 900 square feet. In effect, the figure is not £1,575. The Minister himself has agreed that the figure for a house has risen by £58 since 1952. But that is not the whole picture. I represent a northern constituency, but a borough surveyor in a local authority in outer London told me the other week that the average cost per house was £1,850. That rise has been because of the rise in the cost of living.
My right hon. Friend is asking for some reconsideration of this question, bearing in mind that this is a new Minister who is looking at housing policy afresh. The right hon. Gentleman's predecessor indicated a fairly sharp change in general housing policy before he left office. Having achieved the target of 300,000 houses, he was then readjusting the future allocation on the basis of a greater number of houses for sale, a greater number to be built by private builders, and rather fewer to be built by local authorities. We are considering today the local authorities, because this is their subsidy.
I do not want to go on record as being in favour of high subsidies. I want to bring them down at the earliest practicable moment—all other things being equal, to meet the point of the

hon. Member for Peterborough. It is salutary to think of the average figure of the subsidy from public funds for pre-war council houses. I think the average national subsidy is about 4s. 8d. per house in cases where local authorities do not operate general pools but consider pre-war houses on their own for statistical assessment. Today many council houses are being subsidised at the rate of over 13s. a week and there are flats which are being subsidised at the rate of over £1 a week. That is the sort of crazy finance which cannot go on for very much longer.
I therefore do not want the Minister or any other hon. Member opposite to suggest that I am arguing the case for higher housing subsidies in themselves. What I am saying—and this is the crux of the argument—is that the Minister has to reconcile this reduction in subsidy with an increase in housing costs.
The hon. Member for Peterborough ranged a little wide on rents and I do not want to go as far as that, but I want to say a word or two about the social implications of a cut in subsidies. I hope that will not be inappropriate or out of order at this stage. On this side of the House we must not suffer from any cowardice on this subject. There are people in West Leeds living in back-to-back houses who will not have the amenities of council houses for a long time. I know of many thousands of people on the housing list who, in effect, are paying subsidy to the tune of 13s. a week in order to maintain other residents of West Leeds in council houses better than their own back-to-back houses.
It is no use the previous Minister bringing forward the excuse that these tenants of council houses are in the same position as the mythical tenants who are presumed to receive a subsidy from private landlords through living in rent-controlled houses. These back-to-back dens of iniquity in my constituency have been paid for over and over again and the tenants are living on nobody's back. In the main, many of them are those who could and would afford to live in a better house if we could provide enough better houses.
It is the pressure of national physical capacity against family needs which we face here, and anybody who has been on a local authority housing committee and


has allocated houses knows of the different types of hardship which we have to assess. I have always considered that amongst the greatest types of hardship is one which has received very little consideration by local authorities; and it is that of the decent young married couple who have never had a home of their own and who are anxious to have a family and to bring up a family decently and in comfort. We tend to think of the big family as always having priority, as, of course, it must have priority for the sake of the children.
This sort of thing is reflected in the rents which have to be paid and the Ministers must somehow address themselves to a national rent policy in relation to the subsidy. The hon. Member for Leeds, North-West (Mr. Kaberry), who sits beside the Minister, was on the city council which is the home of the differential rents system. One of the greatest housing reformers in this country, the Rev. Charles Jenkinson, was the father of these systems. All my experience tends to make me recoil from the differential rent.
I have generally found that few people can be trusted to make an accurate return of their income where their own interests are concerned, and I am not in favour of setting up all sorts of inquisitorial methods at local level. The Income Tax man can do that sort of thing and it is far better to set a basic minimum rent where there is one income in the house—a rent which the tenant should pay. Here I am in common with many Labour local authorities who have decided that where there is more than one income in the family everyone over the age of 21 will add a figure of 2s. 6d. or 3s. to the rent. That is a simple device which obviates the necessity of a means test.
The other day I was going over a housing site and I saw motor cars parked on the green in front of a row of houses —a green which had been meant to beautify the estate. I do not say that it is a bad thing for council house tenants to own motor cars; I want to see more cars; but it makes one consider the question, for when one knows how much it costs to run a motor car one must ask whether such a person should receive a subsidy as compared with the tenant of a back-to-back house who will never get a council house in Leeds.
We can easily overcome this part of the problem. The council can compel tenants to have proper garages built and can charge such a rent on the garage as will recoup the deficiency on the house. In Leeds they are considering two possibilities. They have considered letting a piece of land alongside the house at £4 a year ground rent and allowing the tenant to build his own garage. I imagine that that is a good financial undertaking for the local authority. The new policy is to say that where a man has a car he must have a garage built by the corporation for which he will pay 10s. a week, which again is a financial benefit to the housing fund.
We must cut out the overheads and the non-producers—those who go round looking into other people's business. We must produce simple schemes which will reconcile the position of the family man who is trying to bring up his family with the position of the middle-class person who wants a house and cannot afford to purchase it. I support the theory of my right hon. Friend the Member for Ebbw Vale (Mr. Bevan) of abolishing the idea of housing for the working classes. I take the general view that need should be the determining factor. A man may come back from abroad on a decent income and not be able to buy a house at present prices. It is a question of charging an economic rent. We should let the Income Tax deal with all the rebates for the family. Let us have simple housing schemes which will enable the local authority to obtain a contribution from the man who can pay more—a contribution which will enable the authority to create a pool by which we make available a low basic rent for the lower-income groups.
The second point which disturbs me about all this is the fact that it costs £1,800 to build a house in London. I should be out of order if I went into the various devices employed by local authorities to keep the rent down, but these debates are useful if they bring us to realise that it is not how the local authority repairs the houses, it is not even how they build the houses, which determines the rent. What determines the rent is the contribution which we pay in interest to the finances in that building. The fact that three-quarters per cent. on interest charges for the Public Works Loan Board makes a difference of 4s. 4d. a week in rents is indeed a consideration.
If I associate myself with my hon. Friends in asking the Government to take back this Order, it is not illogical. If a Labour Government came in and they reduced interest charges, there would be an obligation on them to lower subsidies. We are not only speaking about Exchequer subsidies but about the rate fund subsidy.
One factor that presses on local authorities is that with every house they build they increase the figure of the rates, and those rates are paid by the whole of the community. It is entirely bad if we organise subsidies in such a way that they, somehow or other, divide our local communities into council house tenants and private tenants. All are members of the same community. Many of the people who go into the houses are ex-Service men. We hear the claims made for ex-policemen and ex-prisoners of war, and we should remember these things. We do not want to divide our communities.
In the last resort, we can get over the business only if we deal in equity between man and man, ratepayer and ratepayer, tenant and tenant. I am afraid that the general trend of subsidies has been to drive people into one or other of two camps. Often chairmen of local finance committees have had to choose between a 6d. increase in the rates for the generality of the tenants or an increase of 4s. a week for council tenants. That is a bad thing. Many of the ideas of subsidies as between one tenant and another outrage our sense of social justice. They should be looked at against a broader background than that provided by the Order brought in by a new Minister, whom we all wish well.
This is a most complicated matter. It is necessary for a new Minister to make himself familiar with his Department. Ministers come and Ministers go. Sometimes they go because they have got fed up with their last job. I have often said to the last Minister of Housing and Local Government that local Government reform would never come under him because he was looking over a foreign field.
The new Minister has come from the Ministry of Supply. In negotiations with him on questions connected with the engineering trade I found that he was a

forthright Minister who did not appear with a conglomeration of officials so that he could get information at second-hand. I think that he is a man who is prepared to look at the job and to rest on his own judgment. In this case he has inherited rather too much. He ought to have given himself a breathing space if he wants to fashion a new policy which will do credit to him and justice to the people.

4.54 p.m.

Mr. J. Enoch Powell: The formula on which the housing subsidies contained in this Order are calculated was not merely inherited by my right hon. Friend from his immediate predecessor. It is the same formula which has been applied since housing subsidies first fell to be calculated after the late war. That formula in principle has received the agreement of both sides of the House. As recently as the debate of, I think, 22nd April, 1952, the right hon. Gentleman the Member for Ebbw Vale (Mr. Bevan), who was the responsible Minister in 1945, reaffirmed his view of the rightness of the formula in itself upon which these subsidies have been calculated since 1945 and from which the present proposals are no exception.
Therefore, the House, in deciding whether to affirm these proposals, is considering whether the elements which have been written into that formula in the present case are the right ones or not. If we can agree that the elements are rightly assessed and have not been under-or over-assessed, as the case may be, then both sides of the House who concurred in the formula must also concur in the result which it produces.
This formula is no secret and is in its essentials not very complicated. It consists in taking the current building cost of a notional house, obtaining the annual loan charges consequent upon such a cost at the ruling irate of interest charged by the Public Works Loan Board, adding the cost of maintenance from year to year, and assessing such subsidy as would result in a net rent which it is thought fair to ask the average tenant to pay.
The House will see that there are three variables in the formula. The first potential variable is the coat of the notional house; the second is the cost of maintenance; and the third is the net rent which it is reasonable to expect the average tenant to pay.

Mr. Pannell: I do not want to quarrel with the hon. Gentleman, but I wish to intervene in fairness to a good many people who at the time criticised the amended figure for maintenance of £8, which I think was brought up to £12. I think that I could convince the hon. Gentleman from documents in my possession how that figure was arrived at. We have always said that the figure of £12 was completely unrealistic.

Mr. Powell: I have not yet come to the consideration of these variables themselves, but I am sure that I have the agreement of the hon. Gentleman that those are the three variables in the application of the formula. I want to take them and to see whether the figures which my right hon. Friend has decided to write into the formula for his present purpose are right or not.
The first is the cost of the notional house. That cost was taken in 1952 as being £1,525 and it has been raised for the purposes of the Order to £1,583, an increase of 4 per cent. The first question we should ask is whether this increase is sufficient or not, whether a higher figure for the cost of the national house should have been taken. We must bear in mind that the increase in the notional cost is based on increases in average costs per foot super. It is the cost of doing a certain amount of building work which is the yardstick by which the cost of a notional house—a house of which the notion remains identical—is adjusted from time to time. But the units upon which local authorities are receiving subsidy are not feet super, but actual unit houses built.
We have to direct our minds to whether the average cost of the actual houses built by local authorities is rising or falling—rising to the extent indicated in the change in the notional figure, or falling. There are some remarkable facts here which are not open to dispute. The Girdwood Committee assessed the building costs—here I am using figures for building costs less site cost—of an average three-bedroom council house in October, 1951, as £1,450. My hon. Friend who was until lately Parliamentary Secretary to the Ministry of Housing and Local Government, in answer to a Question last March, stated that for 1953 the average building cost of a three-bedroom council house, far from increasing, had actually fallen to £1,385.
There is evidence that this downward trend in the average cost per house—in the average building cost per actual house, because the notional house, of course, does not change in size, and its cost rises as the foot super costs rise—there is evidence that this downward trend in the actual cost per house has continued. Mr. Procter, who delivered a paper on the subject to the National Housing and Town Planning Council in July, made an attempt—I think a very serious and careful attempt—to assess the figure in the first six months of 1954, and it worked out at £1,367. So that this figure of the average cost of the houses that are actually being built by local authorities, so far from rising, is in fact falling.
That was precisely what was expected in 1952 both by the Government and by the local authorities, when they agreed that a more general compliance with the suggestion made to them by the right hon. Gentleman the Member for Bishop Auckland (Mr. Dalton) would have this result. There is nothing to be surprised at. My right hon. Friend, who is now Minister of Defence, estimated in April, 1952, that instead of making a £50 deduction on that account he would have been justified in making a £100 deduction from the cost of the notional house. We have seen a fall of at least £65 and, perhaps, of more than £70 in the average cost of the houses actually built by local authorities. I repeat, it is the cost of houses actually built and not the cost of the notional house which really affects the finances of the local authority. So far, therefore, from the increase in the cost of the notional house from £1,525 to £1,583 being too low, it is extremely generous because it takes no account of the fact that the real cost of building houses which local authorities are in fact building has, upon the average, fallen.

Mr. Sparks: What the hon. Gentleman is saying completely and utterly contradicts what his right hon. Friend said. It completely shatters his case.

Mr. Powell: I feel sure that the hon. Member for Acton (Mr. Sparks) is finding difficulty with this difference between the notional house, the notional house which is the basis of the formula, and the real cost of the actual houses which are being


built by local authorities. That is a distinction which it is most important to grasp.

Mr. Chetwynd: Has not the real cost of the houses the Minister referred to risen by 3½ per cent.?

Mr. Powell: Yes, of course, the cost per foot super. The cost of doing a given amount of building work has risen by 4 per cent.; but, obviously, if upon the average there is less building work in the houses being built, the actual cost of the houses being built will have fallen. [HON. MEMBERS: "No."] Well, I have done my best to help hon. Members opposite, but they clearly find difficulty in making that simple distinction.
So I will ask them now to direct their minds to the second variable which is involved in this calculation, the cost of maintenance. Was it or was it not right that the figure of £12, which was accepted in discussions between the local authorities and the Minister in 1952, should have been held at the same figure? Or should, perhaps, the 4 per cent. increase, which would have been a very slight amount, have been added to it?
There is a fact, to which attention was drawn recently, that I think should be borne in mind in this connection. In "Local Government Finance," which is the organ of the Institute of Municipal Treasurers and Accountants, there is an extremely well-informed article from which I should like to quote a sentence on the subject of the maintenance factor:
The writer believes the Minister has not increased the amount of £12 for maintenance and management …it must not be forgotten that several authorities have approached him with the request that they be allowed to make a smaller contribution to the repairs fund than £8 per house, on the grounds that that was too high.
So we have the current experience of local authorities—and, of course, all these formulæ are averages: they have to take a kind of average of the experience of local authorities throughout the country—that, while in some areas the maintenance account may be under pressure, in other areas its size has induced them to approach the Minister for permission not to keep so high a maintenance fund as their statutory duties involved. That casts a quite different light upon the question whether my right

hon. Friend should or should not have increased the maintenance variable.
Now I come to the third and last of the three variables, which, from the human point of view, is the most important, is really the crux of this whole business, namely, the average net rent to which the subsidy is designed to reduce the gross rent. The figure which underlies the subsidies proposed in this draft Order is 19s. a week. We have to make up our minds whether that figure is too high or too low, because if that figure is too high then, of course, the subsidies ought to be higher.
We have a considerable basis of agreement upon which to work. The right hon. Gentleman the Member for Ebbw Vale, who was responsible for these matters throughout most of the Administration of the party opposite, is repeatedly on record in defence of the formula which he adopted as giving a reasonable rent in 1945. I think I can best illustrate this point of view by quoting from what he said in 1949 on that subject:
In 1945 I estimated that if a 10s. rent were paid …it would roughly finance the house … The position today"—
in 1949—
is that … it would be necessary to change the net rent to 13s. and add another 1s. for additional management costs and repairs.… But since 1945 earnings have gone up, too. It is as easy for a wage earner, on the average, to pay at the 1949 rates of earnings 13s. or 14s. net rent as it was for the wage earner in 1945 to pay 10s.…No hardship is suffered at all by virtue of the fact that the local authorities have decided to raise rents."— [OFFICIAL REPORT, 4th July, 1949; Vol. 466, c. 1821–2.]
The proposition here, which I am going to assume was not individual at the time to the right hon. Gentleman but was the view of the party opposite, is that the ratio between average earnings and net rent established in the 1945 subsidies was. a fair one and that it would be right in judging any future subsidies to consider the net rent involved in that light.

Mr. Pannell: Since the hon. Gentleman keeps referring to "the party opposite"—to us on this side of the House—I would ask him whether he and the Government appreciate that at that time we were stabilising food prices. To all intents and purposes the policy of this Government is to let them rip.

Mr. Powell: I shall, before I sit down, consider the question of the relationship between earnings and prices. I quite recognise that my argument would be incomplete if I ignored it, and I shall not do so. But for the moment I am considering the ratio between net rent and average earnings. The ratio between net rent and average earnings established in 1949 was regarded as fair by the House as a whole. That ratio was between a net rent of 13s. 6d. and average earnings for a male industrial worker of 140s. per week. If we take the ratio between 13s. 6d. and 140s. and raise it to correspond with the current level of industrial male earnings we find that the corresponding figure to 197s. 8d., which is approximately the current level of earnings, is a little over 19s.—the figure assumed in calculating these subsidies.
The net rent which my right hon. Friend has used in calculating that subsidy bears exactly the same ratio—or rather, a slightly more favourable ratio—to average earnings than that established and maintained by the party opposite. More than that, these reduced subsidies do not come into effect before next April, and I give anybody one guess as to whether average male industrial earnings will be higher or lower next April than they are now. Therefore, when we take this question of the ratio between net rent and earnings, we must agree that the subsidies do not assume a rent which is too high, but are more generous in that respect than the subsidies calculated and enacted by the party opposite.
I must now fill in the detail to which the hon. Member for Leeds, West (Mr. Pannell) drew attention. The comparison here would be quite useless unless the cost of living was moving with the movement of earnings. If the cost of living was increasing faster than average male earnings, we should have to take that into account and redress the subsidies. I am not going to ask hon. Members opposite to believe anyone on this side of the House on that subject. I am only going to play for them their master's voice. Here is the report of the General Council of the Trades Union Congress—a work which will be as familiar to most of them as it is to me—which was adopted by that Congress at Brighton a month or two ago, and here is what they say on this all-important subject:

On the whole, it appears that between 1950 and 1955 wage rates rose in roughly the same proportion as prices, while earnings rose slightly more.
Therefore, upon the facts set out by the Trades Union Congress itself, the comparison between net rent and average earnings has been, on the whole, generous in its application to this formula.
We have thus examined the three variables which are involved in this formula. In each case, we have found good reason for thinking that, so far from erring on the side of meanness, they err—if they err at all—on the side of generosity. While I am on that point, I would not have the House forget what my right hon. Friend has already mentioned—that the local authorities since October of last year have been reaping the advantage of a quarter per cent, reduction in the rate of interest on the sums which they borrow, and, since June, the advantage of half per cent., and will continue to enjoy these advantages until April of next year.
When all these facts, therefore, are taken into account, it seems to me that, however often my right hon. Friend looked at these subsidies, he would still come to the conclusion that they were more than justly calculated—that they were generously calculated.

5.13 p.m.

Miss Elaine Burton: I should like to join with my colleague the hon. Member for Leeds, West (Mr. Pannell) in welcoming the new Minister in this particular field today, and I welcome him for three reasons. As the Minister is new to this Department, we hope that he will look with a fresh mind at the problems we have to face; secondly, in view of what I want to say, I am particularly glad that the right hon. Gentleman has come from the Ministry of Supply; and, thirdly, to be quite honest, I am glad that the right hon. Gentleman is the new Minister, because I want to get something out of him, and that, perhaps, is the most important reason of all.
Paragraph (3) of this Draft Order deals specifically with those new houses completed after 31st March, 1955, and I have been asked by the Housing Committee of the Coventry City Council to bring to the attention of the Minister one matter arising out of this Order. It seems to the


Coventry Housing Committee, certainly to me, and, I think, to my hon. Friends on this side of the House, that the reduction of the subsidy, if this Order comes into effect as from next March, is likely to mean an increase in rent which the local authorities have to charge the people who will be moving into the new houses completed after that date. I should like to ask the Minister whether he would not agree, in view of that fact, that the City of Coventry should be allowed to build to the limit of its available resources before this Order comes into effect.
A recent decision of the predecessor of the present Minister means that, if this Order becomes law, 500 families in Coventry will have to pay this extra rent and need not do so as we could build the houses immediately. I suggest to both sides of the House that this Order should be discussed in relation to its effects upon the ordinary citizens of this country.
Perhaps the Minister does not know the specific case to which I am referring. Quite simply, it is this. We in the City of Coventry are in a position to complete 500 additional houses before this Order takes effect, but a decision of the right hon. Gentleman's predecessor lays down that we must not do it; in other words, we have to delay the building of these 500 additional houses until this Order comes into effect.
An hon. Friend behind me says, "An extraordinary business." I think it is, too, and I am very much hoping that, as it was not the decision of the present Minister, the right hon. Gentleman may be able to look into this matter again. I should like to give the new Minister the background to the request that was made to his predecessor. Without wishing to talk unduly about my own constituency, I think the House will know that in Coventry we have been faced with a housing problem which is probably unique. We lost more than 4,000 houses in the blitz, and it has been possible only to replace 1,432 of them. Migration to this city is heavy. Previously, in 1939, the population was 190,000. Subsequently it dropped to 150,000, but today the estimated population is approximately 264,000. The housing problem that we have in Coventry predates the war. The rate of expansion of our city has re-

mained at a very high figure for many years.
The City Council approved plans for no less than 5,354 houses in 1937, and for 6,156 houses in 1938. I have said that I am glad that the new Minister has come from the Ministry of Supply. I am stressing that because it is very obvious that the housing programme, and these 500 houses affected by this Order, have a very important bearing on the country's export and defence programmes, in which the City of Coventry is playing a major part.
As long ago as September, 1950, I was able in a debate on defence to raise the question of housing priority in a town like Coventry which is playing such a big part in the defence programme. I am told that Coventry is producing—in value—two-thirds of the total British rearmament programme, while nobody realises better than the Minister the part which the city is playing in the export trade in connection with its great motor-car industry.
I want to give the figures from the Council's waiting list, in asking the Minister to say that these 500 houses may be completed before the proposed Order comes into effect. In 1947, following a review of our housing lists, there were 11,300 applicants, a further 500 who were in temporary accommodation and a further 1,500 who were in seriously unfit property, a total of 13,300. It is quite clear that we have a hard core of housing applications which remains around 10,000. We have little chance of clearing these off within a reasonable number of years, and that is why I am asking the Minister to help us by giving this additional allocation of 500 houses before the Order comes into effect.
The Minister may know that the housing problem of Coventry is more severe than in the country generally and justifies the claim for preferential treatment, if that is what it should be called. Housing in Coventry is the concern not only of the Minister of Housing and Local Government but vitally of the Minister of Defence, the President of the Board of Trade and the Minister of Supply. This draft Statutory Instrument will affect very greatly workers who are contributing to those essential aspects of the country's economy. Perhaps the Minister cannot


give me a definite answer today, but I hope that he will be able to exempt these 500 houses from this Order.
My present application to the Minister to do this is the logical outcome of a plan on which the City of Coventry commenced work at least two years ago, with the encouragement of his Ministry. A regional circular of 25th August, 1952, urged the Corporation to expand their housing programme and to achieve a minimum of 1,650 units in that year. In fact, the city completed 1,715. The circular emphasised that the 1,650 units—I quote—
must not be regarded as a ceiling above which the council may not go.
As the result of this long-term planning, the Corporation are now in a position to undertake immediately the construction of these further 500 houses. All the necessary administrative arrangements have been made and, with the encouragement of the previous Minister of Housing and Local Government, roads and sewers are available to deal with a further 4,200 houses; ample for an extended programme for 1954 and for a substantial proportion of the 1955 programme. The Corporation have been at some pains to encourage local traditional builders to play their part in accelerating the housing programme. Apart from the serious effects of a reduction to the local builders, the Corporation have for some time also been seeking to persuade Messrs. Wimpey to bring into the city additional building labour so that the non-traditional housing programme could be expanded.
The Corporation have been so successful in this effort that all the 500 houses for Which we are now asking the Minister could and would have been built by non-traditional methods, such as those of Messrs. Wimpey. Experience has proved to us in Coventry that a serious setback in output in a large organisation like that of Messrs. Wimpey follows even any temporary restriction of the flow of work. In my constituency, Messrs. Wimpey have built the very fine neighbourhood unit called "The Tile Hill Neighbourhood Unit," and I know what recession follows any temporary setback in construction. If we are not allowed to build these houses we cannot expect Messrs. Wimpey to retain additional labour in Coventry,

and that will affect very much the provision of further housing accommodation in the city.
For many years we in Coventry have been below the national average in building labour. What I am asking for today would still leave us below the average. This shortage of building labour has prevented us from making large inroads into the housing programme at an earlier stage, and today, therefore, we are in a less favourable position than some other housing authorities.
We urgently need the completion of these additional 500 houses before the Order comes into effect. We have the materials with which to build them; the roads and sewers are available for them. One thing only holds us back, and that is that the Minister's predecessor did not feel able to give us permission to go forward. Taking all these factors into consideration, I hope very much that the present Minister will agree that the 500 houses should not be affected by the Order. Will he, as everything is ready and waiting, let us go ahead and build them now?

5.26 p.m.

Mr. J. A. Sparks: I listened with interest to the speech of the hon. Member for Wolverhampton, South-West (Mr. Powell). I was surprised at the declaration he made that the cost of building houses had fallen throughout the country and apparently is continuing to fall. Not much evidence was put forward in support of that contention, but if the hon. Member was right his statement makes utter nonsense of the case which the Minister made from that Box.
Judging between the two, I should say that the right hon. Gentleman is nearer the truth than is his hon. Friend. Building costs throughout the country have risen, taking the broad, average basis. The right hon. Gentleman put the rise at 31 per cent. It may very well be that a local authority here and there is building substandard houses and effecting small reductions by reducing housing standards, but that does not affect the average cost, on which the Minister's notional capital cost of a house is based.
I would ask the right hon. Gentleman to look into this notional figure, because I do not think that he is quite clear about its significance. It is not the actual cost to a local authority of constructing


a house or flat but is completely notional and fictitious. I grant that it is based on a broad general average of tender prices, among other factors, upon which the right hon. Gentleman or anybody else must rely as a notional figure upon which subsidy should be based.
Unless we are to introduce two standard subsidies, one applying to houses of a lower value and another applying to houses of a higher value, we must arrive at one average figure. That is what the right hon. Gentleman has done. Some authorities may be able to build houses below that figure, but I think it is true to say that in the cities and great towns, and particularly in Greater London, a normal two- or three-bedroom house cannot be built for £1,575. If the right hon. Gentleman could indicate precisely where that can be done in London, I and many local authorities will be delighted. The fact is that throughout Greater London and the great cities, building costs have risen much more than 3½ per cent.
I should have been more satisfied if the right hon. Gentleman could have given us examples of how the new subsidy basis will work in, say, a rural area. an urban district and a city. We should then have a clear indication of the effects of the new basis. I say to the right hon. Gentleman that the effect of this new basis of subsidy is far different from what he seems to anticipate it will be. If the new basis of subsidy were compiled on the same basis, taking into consideration all the different elements that had operated previously, and if the right hon. Gentleman were merely operating the mechanics that had previously existed, particularly in the last Administration, then we would expect to achieve precisely the same results as obtained before the interest rates on housing loans rose.
The fact is, however, that the new basis of subsidy leaves a large number of local authorities to shoulder a much heavier burden than the right hon. Gentleman seems to realise. The Minister said that amongst other factors taken into calculation in arriving at the new basis, average earnings had increased and that, therefore, he has made an allowance in his calculations for an additional average rise in the notional rent of Is. That however does not apply anywhere in Greater London. Indeed, I should be surprised

if any authority will escape with anything less than between 2s. and 2s. 6d. a week rise in rents, leaving aside entirely the fact that although average earnings may have risen, the cost of living index has gone up since the party opposite has been in power from 129 to 145. That is roughly 16 points rise in the cost of living, so that when we place increased average earnings by the side of the increased cost of living, there is little margin left to justify any increase of rent.
I shall give the right hon. Gentleman one or two examples of the result of the new basis of subsidy. I apologise for wearying the House with figures, but it is difficult to emphasise my point without doing so. This is actually the situation that would obtain in my constituency, which is typical of the whole of Greater London. I am taking a housing scheme composed of two-bedroom flats constructed in February, 1952, under the old basis of subsidy and to be constructed after April of next year under the new basis of subsidy.
The average cost of those flats in February, 1952, was £1,875. The right hon. Gentleman will realise that when tenders are invited by local authorities for the construction of housing schemes the lowest tender is always accepted. The cost of precisely the same type of two-bedroom flats today works out at £1,950. The rate of loan interest on the February, 1952, flat was 4¼ per cent. and on the new flat it will be 3¾ per cent. The loan charges on the older flat works out at £86 13s. and on the new one they will work out at £81 19s.
Supervision, management and services for the February, 1952, flat were £9 10s.; today they are £10 10s. and the right hon. Gentleman has not taken into consideration in his calculations the important fact that maintenance and repairs costs have risen in addition to building costs. Contributions to repairs account on the February, 1952, flat were £16 10s.; today the cost is working out at £17 15s.
The total outgoings per annum on the February, 1952, flat were £112 13s. under the present arrangement they will be £110 4s. The Exchequer and rate contributions which have to be deducted from these figures are as follows: On the February, 1952, flat the Exchequer and rate contributions were £72 12s.; at


the new proposed rate they will fall to £63 4s., leaving a net rent required on the old flat of £40 1s. and on the new flat £47. In other words, the final weekly net rent will increase from 15s. 5d. on the February, 1952, flat to 18s. 1d. under the new scale of subsidy.
That is a correct computation of the effect of the new basis of subsidy on two-bedroom flats being developed on sites costing between £4,000 and £5,000 an acre. You will appreciate from this, Mr. Deputy-Speaker, that this does not mean an increase of Is. a week on the two-bedroom flats to be constructed under the new formula; it means an increase of 2s. 8d. a week in rents to the new tenants.
What the right hon. Gentleman does not realise in these cases by reducing the subsidy is that the reduction has been off-set by increased building costs. I feel, therefore, that the Minister ought to be prepared to look at this problem again. In my opinion, he has not taken sufficiently into consideration the rise in building costs, and in the cost of supervision, maintenance and repair of dwellings. If he makes sufficient allowance for those increases, he will find that the present basis of subsidy is not fair or adequate.
If the Minister desires to maintain the essential basis for the formulation of the notional capital cost of the house and from that to arrive at his basis of subsidy, he must, in equity, take into account not only the fact that the rate of interest on housing loans has gone down by¾per cent., or that the average weekly earnings have gone up by so much, but also the fact that building costs in the cities, and in built-up areas such as Greater London, have risen very much more than 3½ per cent. Nor do wages today buy as much as they did three years ago; so it is not fair to argue that because wages have gone up the rents of council dwellings should go up as well. That argument completely ignores the fact that the cost of living has risen considerably and very much of the increased earnings has been swallowed in increased costs of living.
To the new towns, in particular, this will be an added difficulty and an added blow to their attempt to build new houses

to draw people from the congested areas Not only that. It will also add to their difficulties, because the rents which they will have to charge for their new houses will, by comparison with the local authority rents, be higher. The reason is that the new town development corporations do not receive the benefit of a local rate fund subsidy in the general sense of the term—unless they can find an authority that is prepared to pay them a rate fund subsidy for taking so many of their people off the waiting lists. Very few local authorities are doing that and development corporations are having to carry out their new housing schemes, generally speaking, without the benefit of a rate fund contribution at all. For them, therefore, the burden will be much greater than it is for my own authority and for many others in Greater London and the cities.
In my view that is bad, because if anything needs encouraging at present it is the development of the new towns, and if the new towns are to be a success then housing accommodation must be provided there at a lower rent than is now being asked. For instance, many London people just cannot afford to go to the new towns and pay, perhaps, anything from 10s., 15s. to £1 a week more rent for a house and, at the same time, to have a reduction in wages as well from the London rate to the rate applying in the new town, which is usually in a rural area.
I would therefore ask the right hon. Gentleman to realise that, although he bases his subsidy on a notional figure of £1,575 capital cost, such a rule cannot be rigidly adopted and applied to all authorities, and particularly to those where the building costs are far in advance of the figure of notional value. He cannot argue from the notional value that his proposals only mean an increase of a shilling a week in the rent of new council tenants. I can assure him that in Greater London and the great cities that is a complete fallacy. It involves a greater burden on the tenants of these dwellings than he himself appears to think at present.
I should like to say, in support of my right hon. Friend the Member for Bishop Auckland (Mr. Dalton), that I feel it is necessary for the right hon.
Gentleman to stabilise the rate of interest at which local authorities can borrow money for housing development. The rise in interest rates and then the rise in subsidies, then the fall in interest rates and the fall in subsidies—all within a period of about three years—has caused tremendous confusion. If those rates and those subsidies are to go up again and down again, it will merely add to the confusion. The right hon. Gentleman cannot run away and say "Well, the loans are for 60 years, and, if a local authority pays 4¼ per cent., there is no question about the loan being interfered with, or, if a new housing scheme has developed at a 3½ per cent. rate of interest for a similar period of years, then it, too, cannot be interfered with for 60 years."
The Minister must realise that many local authorities do not work on that basis at all. These subsidies and rate fund contributions are pooled. In many cases the rents charged for council dwellings are averaged and equated over the whole of the local authority's housing schemes. Not all, but a good many, local authorities try to balance their low-rented pre-war property with their higher-rented post-war property so as to arrive at a general average of rents. That helps very considerably. It is not then necessary to charge as high a rent for a new house or flat constructed today as otherwise would be the case. That is because it has been equated with the rents of all other dwellings.
By raising and lowering the rate of interest and the rate of subsidy, the right hon. Gentleman is throwing the housing revenue accounts of local authorities into complete confusion. It is absolutely necessary, in their interests, especially as we hope that they will continue the good work of building more and more dwellings until the needs of the people are met, that the local authorities should have some assurance that interest rates on housing loans are more or less stabilised for a reasonable time. They can then get on with their schemes and develop on a proper and sensible basis, knowing quite well what their commitments are likely to be for some period in advance.
I hope after all that has been said and will be said in this debate the Minister will not run away thinking that everything

in the garden is lovely. It is far from that. He may think he is just putting the subsidy back to where it was before the interest charges rose. I ask him to take into consideration what I have said. He has not given sufficient attention to the increases in building costs, supervision, maintenance and repair. I hope that on reflection he will be able to provide a better basis of subsidy for the local authorities so that they may get on with their job.

Mr. John Hall: As I understand it, the hon. Gentleman's case was largely based on the assumption that the average cost of building council houses is greater than it was in 1952. The Girdwood Report states that in 1951 the average cost of a three-bedroom council house was £1,450, the average cost in 1953 was £1,385 and this year it is estimated that it may be a little less. If that is so, does not the last part of the hon. Gentleman's case fall to the ground?

Mr. Sparks: I would not be prepared to accept at its face value the hon. Gentleman's statement as applying to all local authorities' housing construction. I do not say that there are not cases in which what the hon. Gentleman has said is applicable, but the general trend of building costs is definitely rising. After all, we cannot consider the question of houses in isolation. In fact, a very important part of the housing schemes of the authorities in London is based on the fact that there is not the land on which to build houses and, therefore, flats have to be built on expensive sites. Although I will concede what the hon. Gentleman has said with regard to certain types of dwellings, I doubt whether he will find that the average costs of flat construction in Greater London have fallen. All experience is quite the opposite.

5.52 p.m.

Squadron Leader A. E. Cooper: The case which has been put forward by the hon. Member for Acton (Mr. Sparks) would appear to rest on two assumptions—first, that building costs have increased substantially, and secondly, that the cost of living has also increased to such an extent that, instead of any reduction in subsidy being justified, there is a case for an occasional increase in the subsidy. Since that would appear to be the main burden of the arguments of hon.


Members opposite, it is fair to address ourselves to those two points.
I believe that everything points to the fact that neither of those two arguments can be sustained. It may be true that there has been a slight increase in building costs, and I use the word "slight" because I do not think any evidence can be adduced to show that the increase has been substantial. I am not aware of any local authority in or around London whose building costs are heavier and which has been forced to increase its rents in the past two years as a result of any increase in building costs alone.
So far as the cost of living is concerned, this must be related to earnings, and the Ministry of Labour statistics show quite clearly that earnings in this country in the last two years have exceeded the increase in the cost of living. There is no doubt about that whatever. One hon. Member suggested that during the six years in which the Labour Party was in power the Government were concerned with controlling prices, whereas we on this side of the House had let things rip. Quite the reverse is true. During the six years that the Labour Party was in power the cost of living was allowed to run and rise very substantially indeed from 1945, whereas in the last two years when we have been responsible for the government of this country the cost of living has risen very slowly indeed, and over the past two months there has, in fact, been a reduction of two points.

Mr. Sparks: Would the hon. and gallant Gentleman deny the figures which have been issued from Government sources, from which it appears that at the time the present Government came into office the index figure was 129, and that until recently it has been 147?

Squadron Leader Cooper: As in so many things, the hon. Gentleman is quite incorrect. The figure has never reached 147 while we have been in power. The highest at which it has stood has been 143, and it is now down to 141. It was 129 when we came into power, but one must bear in mind that the 129 should be set against the figure of 100 which it was in 1947 when the index was set up by the Labour Government who were then in power. It is a simple matter of arithmetic to discover in what period the sharpest increase took place.
It is no use arguing these facts, because it is well known to anyone who is nonpartisan that the cost of living rose much more sharply in the six years between 1945 and 1951 than in the past three years. Earnings in this country have exceeded the increase in the cost of living. That fact is shown by the Ministry of Labour statistics. It would seem that very heavy weather is being made of a very simple matter.
Surely we are not now debating the merits or otherwise of the formula. That surely is not in dispute. All that we are debating today is whether the reduction in interest rates justifies a reduction in the subsidy, in the same way as in the proceedings on the Housing Bill, 1952, we debated whether an increase in interest rates would justify an increase in subsidy. Surely that is the simple issue which the House has to face.
In the debate on the Housing Bill in 1952, the hon. Member for Clapham (Mr. Gibson) said:
The criticism I want to make about this Bill is this. No one really wants to oppose it, but it ought never to have been necessary and had we not had this rather silly increase in the rate of interest it would not have been necessary…."—[OFFICIAL REPORT, 22nd April, 1952; Vol. 499, c. 276.]
If the hon. Gentleman's argument was sound then, in order that he may vote against us tonight on this matter he has got to prove beyond doubt to the satisfaction not only of himself but of his hon. Friends, that the facts which I have stated as the main burden of the argument of the Opposition are fully justified, namely, that building costs have risen substantially and that the cost of living has increased at a faster rate than earnings. I do not believe it is possible for the Opposition to prove those points.
It is perhaps proper at this time that the House should examine the workings of the subsidy, and I think there is much that could be done to improve the position. The hon. Member for Acton suggested that it was normal for local authorities to pool their subsidies and to equate their rents. That has not been my experience, nor do I think it is the experience generally of local authorities. Indeed, they could do no such thing in practice.
For houses built in 1945 there was a certain set of costs and they would obtain a certain rent. Next year another set of


houses was built, and in the meantime the costs had increased. It is not normal for local authorities to say that houses built in 1945 and 1946 should have their rents adjusted to provide a fair average of the two years building. What happens, generally speaking, is that housing estates are developed as a whole and the rents are fixed for those estates. I can assure the hon. Gentleman that most local authorities outside the London County Council, which I admit is a law unto itself, operate in the way that I have suggested.

Mr. Sparks: The hon. and gallant Gentleman may be right when he says "most," but I would say that a substantial minority operate in that way.

Squadron Leader Cooper: I am not going to be so dogmatic as to suggest that every council operates in the way that I have suggested, but I do say that most of them do. There may be a number who do not, but the circumstances are such that most of them operate in some such manner. Ilford is a case in point. In a couple of years we shall have no more land on which we can build. Therefore, our housing position over the years will become stable and it will be possible to organise the housing estates on a system of uniformity. But, so long as the houses are being built year by year at different costs, it is not practicable, and local authorities generally do not equate their rates over the whole.
I think we have got to give local authorities far greater latitude in the use to which they can put the subsidies. I am sorry I did not hear the whole of the speech of the hon. Member for Leeds, West (Mr. Pannell), but this question of differential rents is something which must be looked at very closely. The question of people with small incomes paying rates and subsidising people in council houses who are earning substantial weekly sums is something of which we have got to take cognisance.
We must recognise that housing subsidies were created in order to help people who were in the greatest need and that the present system, whereby anyone irrespective of income can get into a council house and be subsidised by the rest of the community, is not the purpose for which housing subsidies were originally intended.

Mr. A. Blenkinsop: The hon. and gallant Member says that local authorities should have greater latitude. In what respect? They already can use subsidies in any way they wish.

Squadron Leader Cooper: So far as rented property is concerned, of course the hon. Gentleman is correct. But this Government have made it possible for local authorities to sell houses to existing tenants. It can also happen, and, indeed, does happen, that where an individual takes on the burden of buying a house circumstances may arise where he cannot continue his payments, and he may want to go back into rented property, giving up the responsibility of trying to buy his own home. The council may take that house back, but as a council it loses its right to subsidy upon it, and that affects the general subsidy position of the council. I think we have got to correct that sort of thing. It so happens that my local authority is in dispute with the Ministry on this very point.
I welcome this Statutory Instrument tonight because it is the realisation that the financial position of the country has improved and in consequence we are able to give certain benefits to the local authorities. I welcome it not only for that, but because it will reduce very substantially the very heavy costs of subsidies on, the general body of taxpayers and the ratepayers.

6.4 p.m.

Mr. James MacColl: The hon. and gallant Gentleman the Member for Ilford, South (Squadron Leader Cooper) has approached this whole subject with a certain amount of complacency. That is understandable, because I believe that Ilford is one of the very few housing authorities which has a balance in its housing revenue account. I think that the hon. and gallant Gentleman, starting from that background, is not likely to see this problem with quite the same seriousness as those hon. Members on either side of the House who are aware of the very difficult financial situation in which their own local authorities are placed.
The hon. and gallant Member ought to try to make the effort, because that is an important weakness in his approach to this problem, which has also


been shown by other Members on that side of the House today and indeed by the Ministry in its general attitude. In many parts of the country this problem was very acute and serious before this proposed change. It will become a very much more serious one as a result of the change. The point was made with great skill by my hon. Friend the Member for Acton (Mr. Sparks), and it must be admitted that goes against the formula developed by the late Government.
It may well be that the subsidy is calculated with such niceness that the average figures taken over the whole country balance out evenly, but that does not in the least mean that a particular local authority, faced with a particular situation, will find that its own housing revenue is balanced. It may be out of balance for two very different and often contradictory reasons. It may be out of balance because it is an area where building costs are high, where the cost of living is high, and therefore the charges are much greater than the notional charges in the formula. It may also be out of balance because the area is poor and it is impossible to get rents which are as high as those of an average, taking the country as a whole. It is worth emphasising that of the county boroughs in 1952–53, 41 failed to balance their housing revenue account and had to pay in an extra subsidy.
One of the things that the right hon. Gentleman ought to look at is whether it is possible to go on treating this problem as a national problem. I suggest that he should look at it from the point of view of the regional differences as seen from area to area in costs of building and in the rents that can be charged. That is the first major complaint that one can make against the proposals in this Order.
The next point I want to make has been mentioned in the debate and that is to criticise the figures which are the basis for the Minister's calculations. There has been a good deal of discussion about what has happened to building costs, whether they have gone up or whether they have gone down. People have been talking about the price of building a three-bedroom house for £1,300, but the returns of the Institute of Municipal

Treasurers and Accountants for 1952–53 shows that the cheapest average cost for a three-bedroom house was £1,300, whereas the maximum is as high as £2,787. That not only shows an enormous disparity in building costs in different places but shows that the figures mentioned in our debate today are, in fact, quite remote from the real situation.
In a paper to the Institute of Municipal Treasurers and Accountants, the Borough Treasurer of Acton, Mr. W. O. Atkinson, who is an expert on this matter, pointed out that, in the year which I have mentioned, of the county boroughs only six out of 80 managed to get below the notional figure upon which the Minister's subsidy was based. The Borough Treasurer of Acton stated in his paper that he had taken his figures from the survey by the Institute and that the average cost was not a figure of £1,525, £1,575 or whatever it might be, but as much as £1,700, and that is looking at it dispassionately as a statistician and financial expert, not as a politician. I think the right hon. Gentleman ought to keep this figure in mind. It is said that the figure of £1,700 quoted to the Institute is a reasonable estimate on the current cost of building a three-bedroom house. If that be the figure, it completely throws out the whole of the right hon. Gentleman's calculations.
The Acton Borough Treasurer also takes a figure of £14 for repairs and management, £4 being the estimate of the cost of management and £10 being the payment into the repairs fund. His comment on the repairs figure is that the figures published in Housing Statistics
leave little doubt that on the most modest assumptions at least £10 per annum ought to be allowed for repairs.
The hon. Member for Wolverhampton, South-West (Mr. Powell) told us with a certain amount of pleasure that some authorities were agitating to get a reduction of the amount which they have to pay into the repairs fund. It seems obvious that they were agitating for that not because they wanted to cut down the amount to be paid in but because they wanted to balance their housing revenue accounts artificially by paying less into the fund than was a fair estimate of what should be allowed.
The right hon. Gentleman ought to make it clear whether it is his policy to


discourage housing authorities from paying adequate amounts into their housing repairs funds. If he suggests to housing authorities that they ought to make their accounts balance by being parsimonious about their payments into the housing repairs funds, he is encouraging them not to build up adequate reserves with which to keep the houses in repair, and, in view of the wasting assets which houses represent, I cannot imagine a more foolish policy for a housing authority to adopt. The right hon. Gentleman should make it clear that he is allowing for adequate payments into the funds. According to the figures which I have quoted, he is not allowing enough to be paid into the funds but is letting local authorities eat into their capital, which I should have thought was about as mischievous a thing as he could do.
The net effect of the figures given by the Acton Borough Treasurer with the new subsidy is a weekly rent not of 19s., as quoted by the right hon. Gentleman, but of 22s. 10d. In other words, unless the housing authority provides an extra rate subsidy beyond the statutory one, the average rent to be paid should be 22s. 10d. and not 19s. Not only is there a considerable difference between those figures, but the 22s. 10d. is an average to be taken over all the houses. It has to take into account not merely the few people who may have substantial incomes but also the large number who, through ill-health, having large families or being old-age pensioners are not earning a full income and cannot afford to pay a full rent.
I want the right hon. Gentleman to consider my next point with great care. Is it fair today to use the arguments which were put forward in defence of the subsidy by the last Government? The character of the housing problem and the housing priorities has changed considerably since five or six years ago. In those days the emphasis in house building was upon meeting the housing shortage. There was a basis of need. The people on the housing lists were there, not primarily because of poverty, but because, for one reason or another, they just could not get a house by any other means, and it was then reasonable to take an average sample of the population for calculating the notional rent that people could afford to pay.
Now, however— the right hon. Gentleman's predecessor has made great play about this—the character of the housing policy has changed and the emphasis is on slum clearance. That change will have a significant effect on the notional rent which the average person who is being rehoused can afford to pay. Although some of those living in slums may have large family incomes, most of the people living in such conditions have low incomes. The tendency has been for people with low incomes to gravitate to the cheap, bad property in the slums or not to move out of the slums as they would if their financial situation improved.
Therefore, if a housing authority is taking the right hon. Gentleman seriously and making slum clearance its most urgent task, it will find that it is rehousing people with low incomes who, ex hypothesi, cannot afford to pay the notional rent. Consequently, it is fallacious for the right hon. Gentleman today to base the subsidy on the kind of calculation which was used—I doubt that it worked well then, but there was a case for it—five or six years ago.
These are all complicated problems, and it is obviously unfair to ask the right hon. Gentleman to make up his mind about them straight away, but it is most unfortunate that at the very beginning of his tenure of office he should find himself introducing a proposal dealing with the thorniest, most technical and most controversial problem in the field of social service— the basis for the calculation of housing subsidies against the general background of housing finance.
The right hon. Gentleman would have been better employed if he had today gone to the conference of the Association of Municipal Corporations and discussed with the delegates what their real problems were, instead of coming here to present what on the face of it is a very slapdash and ill-thought-out argument which fails to appreciate the real significance of these problems. That is the real criticism against the right hon. Gentleman; he is not responsible for the present situation, but he has not availed himself of the opportunity to take time to think about the problems as a whole and to determine how the financial side of his policy ought


to be linked up with the general deployment of his housing policy so that he might later come to the House with a mature judgment on the problems.
It will not do for the right hon. Gentleman to say that the argument is the same as that used five or six years ago. In undertaking his very grave responsibilities, he would not only have been more courteous to the House but would have shown greater appreciation of the mood and temper of local authorities if he had taken time to consult them and think about their difficulties instead of coming forward in this rather casual way with an ill-thought-out proposal.

6.19 p.m.

Mr. C. W. Gibson: I lend my voice to the appeal which has been made to the Minister to take back the Order and reconsider the matter. I do so with some sense of logic, because I have never been satisfied that the formula on which the subsidy is paid is either a good one or is working out fairly to the local authorities and the ratepayers.
It is true that if one goes into a dark corner and indulges in a mathematical exercise one can make something of the formula, but not a local authority in the country will admit that a reasonable house can be built for anything like the figure which the Ministry take as the notional building cost. The figure is completely false.
Time after time we have made efforts to persuade the Ministry to find some better method of calculating the cost of building on which subsidies should be paid, but ever since we have had these housing subsidies the idea has persisted that we must try to calculate what we call a notional figure of building costs and pay the subsidies on that. That would be all right if it worked, but in fact it does not work. It has meant either very heavy losses on house building by housing authorities or an increase in rents to a figure higher than that which the average workman can pay.
That is what is happening now. Some borough councils in the London area are raising their rents in order to avoid a supplemental rate charge for housing. As a result, in the borough which I represent old-age pensioners are being asked to pay 23s. a week for a one-room

flat. That is absolutely outrageous and it is no answer to say to these people, as is said in the district, "All you have to do is to go to the public assistance board and they will meet the rent charge for you." That is only transferring the charge from one department of State to another. In any case, it puts the old-age pensioners in a very uncomfortable position. Many of them will not go to the public assistance board. I know some in Clapham who will not do it and who are paying these excessive rents for new flats. These are very comfortable flats but, as a result of the high rents, the pensioners are suffering in the amount of food and in the quality and quantity of clothes which they can buy. We see this month after month as we meet them.
This Order should be taken back and new consideration given to the basis of the system. The subsidy which is being paid at the moment is not excessive. In London we have had to impose a supplemental rate subsidy of about 8d. in the £ in order to keep rents down to a figure which the average workman can afford to pay. It is clear, therefore, that the local authorities, at any rate in the South of England, are not making a lot of money out of this subsidy. My information is that scarcely a local authority in the country will agree that, on the present basis of subsidy and with present costs, it is possible to make the housing accounts balance without raising rents to a level which is higher than it should be. These rents are, of course, far away from the notional 18s. or 19s. which is assumed in this proposal.
I cannot understand why the Minister has brought forward this proposal, because on 29th June his predecessor issued a document called "Housing (Financial and Miscellaneous Provisions) Act, 1946" which dealt with the question of whether there should be increased subsidies. Paragraph 4 of that document reads:
The most important of these alterations is the recent reduction in the rate of interest on loans from the Public Works Loan Board. This is the second which has been made since the present subsidies were fixed. The rate is, therefore, now one-half of 1 per cent. below that which then ruled. Costs of building and of maintenance have somewhat increased"—
Hon. Members will observe that the costs have not decreased, which is contrary to


the impression which we have been given today. The paragraph continues:
Costs of building and of maintenance have somewhat increased, but economies in design without any reduction of the room standards have been made.
The paragraph adds that it is hoped that more economies will be made.
I am tempted to say what I think of the so-called "People's House." I told my right hon. Friend the Member for Bishop Auckland (Mr. Dalton) when he first looked at it that some of us would never agree that it is a reasonable standard of working-class housing to build a house in which the staircase comes out of the kitchen or the living room. Thousands of us had to live in such houses in London when we were boys. In due time they were condemned as unfit to live in. The "People's House" has insufficient space behind the front door for two people to stand together, and there is no place to keep a perambulator. In any case, these houses do not appear to be very much cheaper than the normal, decent three-bedroom house which has plenty of circulating space, as the architects call it, on the landing and behind the front door. Nevertheless, this house is apparently one of the ways in which the Government hope to save on the cost of houses.
This document goes on to say, "Average earnings have increased." In no Housing Act since the first Act passed by this House have the rents of working-class properties built by local authorities been related to the wages earned by the workers. The Acts themselves—certainly the 1936 Act—say that the rents should be related to those of comparable properties in the district, having made all the necessary adjustments for improvements which have been made.
The rents were not related to earnings. Why should they be? Why should rents be increased because temporarily there is an increase in the average earnings of the workers, secured through trade union pressure arising out of the increased cost of food? That is the only reason for the increased earnings. Why should we expect the workers to meet the increased cost of food and at the same time say, "We shall knock a bit off the subsidy and you will meet that by an increased

rent"? This is hitting them twice in a very sore spot, and, if we are not careful, one result of a reduction in housing subsidies might easily be another cycle of wage demands all over the country in order to meet the increased rents.
The Government should take the whole problem back and consider it again. I have a feeling that it would pay to get rid of subsidies altogether and to let the housing authorities have their capital on interest-free conditions. It is difficult for anyone to work out figures without the assistance which the Minister has, but the present system is beginning to cost us an enormous sum of money.
As my hon. Friend the Member for Leeds, West (Mr. Pannell) said, the position is becoming absurd in some directions. The subsidy which the London County Council receives for certain types of flats which it builds is ridiculous. It comes to much more than £1 a week. We are obviously reaching an absurd financial position. The whole problem should be reconsidered and some other method found of financing local authority house building. I put in a plea for the Government to consider adopting the policy which is used by them in other matters—that of allowing the housing authority to have its capital from the Public Works Loan Board free of interest.
I do not suggest that that will not be a subsidy, but it will not be such an obvious subsidy as we have now, and I believe that it would cost the State less, would relieve local housing authorities of a very great burden and would tend to reduce rent levels rather than push them up. Nothing will cause more trouble in the back streets of our large towns and in our villages than a substantial increase in rents.
We have to remember that already some authorities have found that the rent which they charge is as much as 20 to 25 per cent. of the earnings of the tenants. That is wrong and it is asking for trouble. The percentage was nothing like as high as that before the war. Moreover, it is quite false to assume that the average income of the workers in this country is about £10 a week. The examination of London rates by the Ministry of Labour some months ago showed a different figure. There are tens of thousands of people in London who are getting £7 or less per


week. On that figure it is quite impossible for people with one or two children to meet the rent charges which will have to be borne if the housing subsidy is reduced merely because, at the moment, there is a one-half of one per cent. cut in interest rates.
I join with others in congratulating the Minister on his appointment. I think that he has an even tougher proposition than that of managing the Ministry of Supply, and one which will get him even more brickbats. I think that it would be a good thing if he would take back this draft Order —because there is no immediate hurry for it—and see whether a completely new approach could not be made to the method of financing local government houses, so that it would become not only a simpler proposition but one that would enable rents to be prevented from rising, as they are now doing all over the country, and confined to a level which the average working man with his present earnings can afford to pay.

6.31 p.m.

Mr. George Chetwynd: I want to get away from the mathematics of this debate, because it seems to me that figures have been used in this matter very much as the drunkard uses a lamp-post—more for support than illumination. I want to consider, not the mathematical background, but the political background to this draft Order.
The hon. and gallant Member for Ilford, South (Squadron Leader Cooper) gave some indication of why he is supporting the Order. It is part of the economy campaign of the present Conservative Government against the social services. There was pressure at the Blackpool conference and throughout their local activities to minimise what they call the heavy and increasing burden of housing subsidies placed upon rates and taxes. This is part of their campaign of pressure to reduce subsidies.
Of course, it is also part of the campaign, which we have seen in operation during the past year, to limit the activities of the municipal authorities in the sphere of house building. This is a two-fold policy, by a reduction in the amount of subsidy and consequent increase in rents, first to make it more expensive for people to live in corporation houses; and secondly, when they have to meet a rent

increase, not of 1s. as has been put in the figures but of 2s. 6d. or more, they are going to find it more difficult to live there, and consequently those wishing to go on the waiting lists will not be quite so anxious to move into corporation houses. So it is hoped that the demand for corporation houses will be reduced. That, in turn, would reduce the number of houses that the corporations would be required to build, and consequently less would have to be paid in subsidy.
The other side of this move is contained in the departure in housing policy by this Government, which is to change the emphasis on housing from need to those who can afford to pay. Whereas in 1953 some 235,000 houses were built for letting and only some 60,000 for sale, in 1954 some 210,000 were built for letting and some 90,000 for sale. The ex-Minister expressed the hope that in 1955 the proportion for letting would be 160,000, and for sale 150,000. So the most he is contemplating having to pay a subsidy on in this year is 160,000 houses. Therefore, by reducing the number of houses available for subsidy he is able to reduce what is looked upon as the burden of the subsidy upon taxes and rates.
In doing this, and in encouraging people to purchase their own houses because of the high cost of living in corporation houses or difficulty in getting corporation houses, he is putting considerable pressure on people to buy these houses, which they really cannot afford to do. It would have been better to maintain the level of houses for letting, even if it had meant an increased amount payable in subsidy, than to put this burden on people.
It is hoped that by this transaction the reduction in subsidy will save the Government something like £750,000 in the year, and the whole of this burden will fall upon the tenant. It is quite nonsensical to expect a notional rent increase
of 1s. I think that it has been completely accepted in the debate so far that the actual figures show that it will not be an increase of is. in rent which the tenant living in the new 1955 house will have to bear but that it will be something in the nature of 2s. 6d. or even more.
This is a change away from housing by need to housing by ability to pay. If


there is real pressure on the party opposite to abolish subsidies, they had better turn their attention from that to abolishing the need for them by doing more to take the profits out of building and reducing the high interest rates. We could make a greater saving in housing costs than £750,000 if we tackled seriously building costs and monopolies in the building industry, and brought interest rates down considerably. Let us set about the component parts which go to make up the subsidy policy.
We have had arguments about the capital costs of building—whether they are up or down. The Minister agreed with most of us on this side of the House that they are up. Some of his hon. Friends seem to think that they are down. Surely, in these circumstances, it would be in the Minister's own interests to give us detailed figures and prices, and to say, "This is exactly what is happening in building materials, labour and so on." Instead of doing that, he comes along with a vague 3½ per cent. increase in housing costs in this last period, and has not sought to give in detail the application of them. We know that interest charges are down; we know that he is maintaining the same repairs and management ratio; and we know that he is putting up the notional rent by 1s. It is argued that the result of all this manipulation will be a reduction in the subsidy. I hope that he will at least attempt to convince us beyond all doubt that this is so, and that he will take this Order back and bring us the results of some detailed investigation and examination of the different housing aspects.
This is the real test and the fair test. Will the tenant going to live in one of these new council houses built after 1st April, 1955, be as well off after paying his rent as the tenant living in a corporation house now? If this arrangement goes through, and rents go up to the figure to which I think they will go up, the tenant of a house in 1955 will be worse off—and appreciably worse off—than his neighbour going into a corporation house this year, for the simple reason that this notional rent takes no account whatever of the increase in the cost of living and the particular items in which that increase has taken place.
Before the war, in many areas, people in corporation houses had to pay a high rent for a corporation house and spent

very little on food, with the result that many people living in corporation houses with high rents were suffering from malnutrition. I do not want to see people living in corporation houses in 1955 having to decide how much money they have to spend on rent—which is an absolute necessity or else they can be put out—leaving them the remainder for food, with a possible increase again of malnutrition.
We have seen throughout the debate a complete conflict of figures on what the increase is likely to be. We have had no evidence of the actual building costs and how they have gone up or gone down, and I would have thought that at this stage the Minister would have saved himself a lot of unnecessary work later on if he took back this Order and had another look at it. His predecessor, speaking on the Second Reading of the Housing Bill in 1952, said:
The purpose of the subsidy is a simple one. It is that houses should be provided for these new tenants at rents they can afford to pay and which may be regarded as reasonable in the prevailing conditions."—[OFFICIAL REPORT, 22nd April, 1952; Vol. 499, c. 229.]
I am convinced that the rents which under this Draft Order the new tenants will be asked to pay in 1955, in the light of rising costs, which the Government have done very little to check, cannot by any stretch of the imagination be regarded as reasonable and will be rents which many of them will not be able to afford.

6.40 p.m.

Mr. Frederick Elwyn Jones: The Minister has conceded that one of the vital questions in considering the equity of his proposals, which the House is considering tonight, is whether the capital cost of a house at £1,583, which I understand is the basis of. the proposed subsidy, is a fair and realistic estimate. My information, based on the experience of the Borough of West Ham, of which I have the honour to be one of the representatives, is that it is not a fair or realistic estimate.
I am told that the all-in cost of a house in West Ham now is £1,840—that is to say, about £260 above the Minister's figure. It may be said in criticism that this figure is too high. The local authority informs me that it now proposes to erect a group of houses designed, in accordance with the latest recommenda


tions of the Ministry, to achieve the maximum of economy in land and building effort. Yet the tenders for these new houses show that the all-in cost is likely to be about £1,730—again, over £150 above the Minister's basic figure.
The consequence of that miscalculation, which is the basis of the proposed subsidy, will be very grave in the blitzed area of West Ham. I am told that an addition of £200 to the capital cost represents an annual burden in loan charges of about £8 8s., which by itself would require an addition of 3s. 3d. to the weekly rent. The weekly rent is already very high, and if that is the consequence of the proposed subsidy it will mean great hardship to a community which already finds the greatest difficulty in making both ends meet.
The difficulty that has arisen is due probably to the fact that these subsidies for houses are based on national conditions. The calculation does not pay due regard to the special difficulties of the Metropolitan area, which is at a considerable disadvantage owing to the higher building costs, which are not in fact offset by higher rents, as the Minister has been contending.
I ask the Minister, therefore, to look at this matter again. He is new to his Department and to this problem, but it is not a new problem to a community like West Ham. It would be a tragedy if the right hon. Gentleman's entry into his Department were, by reason of the inadequacy of the housing subsidy, to start a period of even greater difficulty for a blitzed area with an inheritance of destruction and slums and where thousands of families still live in the utmost squalor.

6.44 p.m.

Mr. A. Blenkinsop: For some little time I had fear lest the new Minister and the Parliamentary Secretary, whom we welcome to the House this afternoon in their new positions, should feel that the general atmosphere of good will which pervades the House when it receives a new Minister would affect the issue that we are discussing or that they would have far too easy a time on it.
It should be perfectly clear both to the Minister and to the Parliamentary Secretary, after some of the speeches we

have heard, that we are far from satisfied with the proposals that have been put before us this evening, and we seriously urge the Minister, as his first very proper act in the House in his new position, to take these proposals back before it is too late and to have the further discussions for which the local authorities have been asking and for which they asked his predecessor. It is only fair that, coming fresh into his office and because of the real and sincere differences of opinion about the validity of the figures presented this afternoon to the House, the Minister should accede to that request for discussions.
Here is a fair chance for the new Minister to examine the question of subsidies in relation to the wider problems of housing as a whole. As my right hon. Friend the Member for Bishop Auckland (Mr. Dalton) said, this is only part of the wider housing problem. Surely it would be sensible for the Minister not to tie himself down to this proposal now until he has had a chance of formulating his broader housing policy.
I want to examine, as several of my hon. Friends have done, some of the assumptions upon which the figures have been presented to us and to make it clear that we do not accept them. We would not disagree with the broad argument that if the rates of interest fall we must, other things being equal, reconsider the actual level of housing subsidies; no one would doubt that that is necessary and right. As my hon. Friend the Member for Leeds, West (Mr. Pannell) rightly pointed out, we have never felt happy about the size of housing subsidies; hon. Members on all sides have very properly felt a real anxiety about the size of these subsidies; but we feel most strongly the need for their continuance as long as the conditions of today are maintained.
It is when we examine the figures for the cost of house building that we come most severely into conflict. I thought that the hon. Member for Wolverhampton, South-West (Mr. Powell) tried to prove too much. We accept that he is a great Greek scholar, but I am not sure that we accept him with quite the same good will on other subjects. I am sorry he is not now present. He attempted to prove that broadly housing authorities were achieving much lower building costs on the houses they were building.
That is not at all the experience of any of my hon. Friends on this side, who have quoted from experience of their own areas, nor is it the position as outlined with great authority by some of the municipal treasurers and, in particular, by Mr. Atkinson, the Acton Borough Treasurer, who has already been quoted. His figures, which so far have not been challenged, seem to prove completely that, far from housing costs having fallen, there have been considerable increases and the figures upon which the Ministry made its last calculations for housing subsidies in 1952 were wholly inaccurate then, and the Government have not put the matter right in their revision today.
It is argued, apparently, by the Ministry that the building cost of an average three-bedroom house is £1,583; but that is not the building cost as it is known by the great bulk of local authorities throughout the country. The experience of London borough councils has been mentioned. We know that many of them have to face a much higher building cost. But even apart from London, the position in towns and cities throughout the country proves conclusively that the figure of £1,583 used by the Minister is quite unreal.
The points raised by the Acton Borough Treasurer about the position of the country as a whole seem to be fully borne out by our experience. My experience of the North-East of England, where I have most contacts and about which I have most knowledge, suggests that the figure used by the Minister is at least £100 short of the building cost of the actual house—not a notional house but the type which is being built today. Those houses are each costing at least £100 more than is suggested by the Minister, and I am sure that other local authorities could provide figures a great deal higher than that.
All we ask is that this matter should be properly investigated; that the Minister should take this opportunity of meeting local authorities and discussing the matter with them. We know from experience that we cannot hope always to reach agreement with local authorities on these matters, but we feel that it is only fair and right, upon the entry into office of a new Minister, that he should take the opportunity of discussing the matter with them. I was rather disap-

pointed that the Minister did not take the opportunity of meeting some of the local authorities at their conference this afternoon.
This Order could very well have been postponed. As far as I can see, nothing would be lost by postponing its consideration, even until the beginning of next year. It does not affect anything in any serious way, and I can see no reason why the Minister has refused to make this gesture—as it would be—to local authorities at the opening of his period of office as Minister of Housing and Local Government.
One of my hon. Friends said that the new Minister had no experience of this work. That is not absolutely true; as he himself confessed—and I think that "confessed" is probably the right word—he had some experience of it in the Caretaker Government at the end of the war. I am not sure that we should regard that as an altogether happy augury for the future, but that makes it all the more important that he should now offer to meet the local authorities. There is still time to do so.
After the useful discussion we have had this afternoon I can see no reason why he should not say, "There are some matters which should be looked at again, and I think we should meet the local authorities and discuss these things with them." That is what we are asking. If the Parliamentary Secretary does not feel able to make that offer, we shall have to vote against this Order, although we would much rather not do so. We would much prefer that the Government should accept the suggestion I am making to them and approach the local authorities again.
I understand that many local authority associations, possibly including urban district councils, feel very strongly about what they regard as a miscalculation of the cost of house building. Some of the authorities which I have consulted argue that one of the matters which has been left out of the Ministry's calculations is the amount of the architect's fees. These amount to something like £30 per house. That may be regarded as a small matter, but if it is added to the figure of £70 or £80 which some of the smaller local authorities argue is the miscalculation of the cost of building, the total difference is something over £100. That is the amount


by which local authorities claim that the calculation placed before us today is wrong. That is a sufficiently important consideration for us to argue that the Minister should discuss the matter with local authorities.
Certain questions of principle arise when one considers the whole question of housing subsidies. I must express some of the anxieties or suspicions of my hon. Friends. They may be quite unjustified, but we think it is right that the Minister, especially as he is new to the Department, ought to seek to allay them, because they are also felt very considerably by interested parties outside the House.
Is it the Government's intention to use the reduction of housing subsidies as a means of forcing local authorities to accept lower standards of house building? We have already heard the arguments about the "People's House." We are concerned about the fact that it is now very difficult—I shall not put it higher than that—for local authorities to build anything else than the "People's House." The pressure brought to bear from the Ministry and the regional officers of the Ministry to build the "People's House" or its equivalent is so strong that it is very difficult for any authority to do otherwise. My experience is that, instead of a vast saving in money which many people may have hoped would result, the cost of those houses is still a good deal higher than the average cost of houses a year or two back. We are concerned to know whether the Government are not, perhaps quite unconsciously, attempting to persuade, force or cajole local authorities into building down to standards much lower than we believe to be right.
Another very serious issue, which involves a matter of principle, is the Government's attitude concerning the kind of people who should occupy council housing estates. As far as we can gather, both from the tone of this debate and from speeches made by the previous Minister, this Government believe it to be right that those who have more than a certain very moderate income should not be found on council housing estates. We take a very different view. We believe very strongly that council housing estates should cater for a variety of tenants. We think that there should be

a reasonable distribution and—as has been urged in the past by many Labour Ministers—that we should strive to create reasonably diversified communities.
We realise that if that is done we must face the problem whether it is right for an equal subsidy to be paid to each tenant. That is a matter which has been within the control of local authorities practically ever since housing subsidies were first introduced, and they have adopted various means of trying to meet this problem. We say that the important object is to avoid producing housing estates, such as were occasionally produced in the inter-war years, on a purely class-segregated basis. We must not repeat them. The horror we all know of what used to be and still are called slum clearance estates must be avoided if possible.
It was our policy to encourage a reasonable variety of tenants on housing estates, based upon an interpretation which recognised that there was need amongst people with moderate incomes as well as amongst those with low incomes. I fear that the trend of policy of this Government is to encourage local authorities to say that they will not have tenants on their council housing estates who have an income over a certain figure. We feel strongly that this is wrong, in principle, because it will deny us the kind of housing estates we want, and because we are hoping to build up a happier and more contented society.
I hope, therefore, that the Parliamentary Secretary will say something about this matter when he replies to the debate. I apologise for asking him to reply on such an issue at short notice, but it is his own fault. In many ways, having reached this point, I would prefer the debate to be adjourned, so that some of the important issues of principle which we have been raising could be answered after there has been more time for consideration. In that way we could have a more valuable termination of the debate than we are likely to get if the Government insist on pressing this Order tonight.
I have tried to explain the reasons on two main issues why I think it is right that the Government should take back this Order for further consideration and consultation with local authorities. I ask them to do this, first, because we say that the figures on which the new subsidies are


based are, in our view, incorrect. They are challenged by the local authorities in great detail and so far we have had no counter-argument that has disposed adequately of the facts and figures put forward by the local authorities. On those grounds alone we think it right that this Order should be taken back.
Secondly, I am urging that the opportunity should be taken on this Order to discuss some of the wider principles of housing which are essentially bound up in it. On those grounds, too, we ask the Minister to take back the Order and reconsider it so that he can come back to the House with a fuller and more general statement of his housing policy, including these proposals for subsidy, than obviously is possible today.
It is not too late even now for the Minister to do that, and there is no real reason why he should necessarily accept what has been left on his lap by the preceding Minister. There is a good deal of truth in what some of my hon. Friends have said, that the preceding Minister had a way with him with the Treasury and was able to get a good deal of what he wanted from them, perhaps more than was altogether satisfactory to the Chancellor. I hope this has not meant that the new Minister will find himself from the start in great difficulties. We hope that his predecessor did not move on gradually towards foreign parts in order to escape the realities of certain problems that he has left behind.
I hope, therefore, that the Parliamentary Secretary will now say that the Government are willing to accept the reasonable offer made from this side of the House. If the hon. Gentleman finds it impossible to do so, the Minister will start office with an unfortunate impression being left in the minds not only of hon. Members on this side of the House but of local authorities too. That is something which he does not want. I appeal to him to do what we ask, otherwise we shall be forced to divide.

7.4 p.m.

The Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. W. F. Deedes): Like the right hon. Gentleman the Member for Bishop Auckland (Mr. Dalton) in welcoming my right hon. Friend and myself, the hon. Gentleman for Newcastle-upon-Tyne,

East (Mr. Blenkinsop) suggested that this was a good moment for a fundamental reconsideration of the factors which have led to this Order, and from their point of view that was a good tactical move. However, from the outset I should stress the general point that there is no departure in this Order from the policy pursued, or the principles accepted, by both Administrations since the Housing Act of 1946. If I may use this analogy, the foundations remain precisely the same although there have been from time to time alterations of the superstructure. This is one of them. In other words, the basis of calculation is unaltered and it should be beyond dispute.
If I may now turn to the opening speech of the right hon. Gentleman, he made two principal points. The first was to suggest the postponement of this Order, a point which has been reiterated by his hon. Friend who has just spoken. I suspect that was partly a tactical move for the benefit of my right hon. Friend the new Minister. However, the right hon. Gentleman did not say a great deal, either with facts or figures, to justify his proposition that there should be a postponement, except to say that the local authorities disagreed. If the local authorities disagree on this occasion when the subsidy is being reduced, in 1952 and 1946 when the subsidy was being increased they, perhaps not unnaturally, did not disagree. To postpone this Order now would be to abandon the whole basis, which has been agreed for eight years; and this is not the moment to do it. However, any ideas which the right hon. Gentleman has concerning the wider future will be gladly considered by my right hon. Friend.
The second point made by the right hon. Gentleman was whether the subsidy would be changed if there were a sudden or large movement in the interest rate. It is accepted that this system is subject to the annual review in June in the case of a reduction; where there is to be an increase, there is legislation. Any major change in the interest rate leading to serious hardship or its likelihood would, of course, receive the special consideration of my right hon. Friend.
Throughout this debate doubts have been cast by a number of hon. Members upon the capital cost of the notional house, and perhaps it would be a good


thing if I said a general word on that subject. I agree that the agreed figure for the notional house is a very important one and is indispensable for the purpose of these calculations. Inevitably, however, it will be disputed by those whose standards or costs are above the average. There are bound to be figures above the notional figure or there would be no average. To describe it as fictitious, as did the hon. Member for Acton (Mr. Sparks), is going a little beyond the facts of the matter.
I can only say that this notional figure is most carefully calculated, and it is worth mentioning that more than one independent source comes somewhere near the figure put forward by the Ministry. For instance, there is in the basis a figure which, if anything, suggests one slightly below the figure given here today. My hon. Friend the Member for Wolverhampton, South-West (Mr. Powell), in what all hon. Members will agree was a most lucid speech on this rather intricate subject, also indicated that there are other independent checks which suggest that the figure is not so wide of the mark as some hon. Members have suggested.
There was some confusion as to whether costs have gone up or down. The best way I can deal with the point is to put it in this way: If we compare like with like—that is to say, the 950 squarefeet house with another 950 square-feet house—there has been an increase of 3½ per cent., or £58, since 1952. If we compare the houses being built now with those being built in 1952, there has been a reduction because of the increased popularity of the "People's House" design.

Mr. A. J. Champion: A lower standard.

Mr. Deedes: I am coming to that in a moment. This design has met, and indeed has overtaken, the higher cost. I hope that clears up the point as to whether costs had risen or fallen on which there was some confusion.
I should like to interpose a word about the speech of the hon. Lady the Member for Coventry, South (Miss Burton). She spoke of 500 houses which were being held back in that city. I am sure that she will acquit my right hon. Friend and his

predecessor of holding back the houses so that they might lose the subsidy, but my right hon. Friend will be glad to discuss this matter with her. Perhaps she will be satisfied with that assurance.
The hon. Member for Acton based the earlier part of his argument on the suggestion that very few local authorities in fact were building the smaller house. It is right that I should remind him what the proportions now are. Taking the second quarter of 1954, out of 13,509 houses built, 11,724 were of what I might call "People's House" design, that is, below 950 square feet. That is a percentage of 86·8 compared with about 33 per cent, in the first quarter of 1952. The other point which the hon. Member made was that there had been an increase in the cost of building flats. On the figures he gave, I calculate the increase at about 4 per cent. The figure which my right hon. Friend gave is about 3½ per cent. Therefore, I do not think that there is a wide disparity there.
The hon. Member for Widnes (Mr. MacColl) was concerned with the disparity in house-building costs. All that I maintain is that some high figures do not render the notional figure fictitious. This notional figure has always been accepted as a national figure and there has been no serious suggestion that we should treat it in a regional or any other way. That would lead to serious difficulties. I agree that, from the point of view of the Metropolis or other big authorities, this would seem to be a relevant argument, but up to now the national notional figure has been accepted.

Mr. Elwyn Jones: If the present basis is causing injustice, as I pointed out with regard to my own area, is there any reason why the present basis should be regarded as something unalterable, fixed and immutable?

Mr. Deedes: There has been no suggestion that the disparity between the big city building undertakings and the smaller ones is greater now than it was five or 10 years ago. The argument does not really justify a re-opening on a regional basis. The hon. Member for Clapham (Mr. Gibson) said that the present subsidy was not too high and that it should continue at the present rate. The subsidy in 1952 was agreed with the local authorities. Other things being equal, a decrease


in interest rates obviously decreases costs, and therefore, if the subsidy were maintained now as it was then, the decrease in interest rates would really amount to putting up the subsidy.
A good deal has been said about the smaller house by practically all hon. Members who have spoken in this debate. I do not think that the history is in dispute. The right hon. Member for Bishop Auckland used three expressions. He said that he did not prescribe the "People's House." He mentioned the word "circulation" and he said that he invited the attention of the local authorities to it. It might be said, therefore, that what he circulated to the local authorities was really permissive. Would the right hon. Gentleman accept that?

Mr. Dalton: Yes.

Mr. Deedes: The same would apply to my right hon. Friend the present Minister of Defence. My right hon. Friend did nothing more than circulate with rather more energy, and more persuasively, the ideas which the right hon. Gentleman, had provided nine months earlier.

Mr. Blenkinsop: Would the hon. Gentleman deny that his regional officers pressed on local authorities the need to accept the "People's House" with such urgency that a great number of local authorities felt that they had no liberty left as to what type of house they should build?

Mr. Deedes: I do not accept that for a moment. We are only anxious that the right hon. Member for Bishop Auckland should not deny to himself the credit to which we feel he is entitled.
The reception of this design, to whomsoever it should be credited, may be judged by the figures. Whereas in the first quarter of 1952 one-third of the houses in local authority programmes were to this design, the percentage has now risen to approximately 87. Therefore, it is fair to say that that is a popular choice It has been suggested once or twice that the Ministry has driven a hard bargain with the local authorities in the course of the recent negotiations. But it is right to point out that settlement has not been reached in every particular with arithmetical exactitude. For example, if the present Public Works Loan Board rate of 3¾ per cent. had

operated when the higher subsidy was fixed in 1952, the general subsidy rate would have been £21 18s.; but the proposal now before the House is in fact for £22 1s.
I do not want to make over-much of that. I merely wish to say that where there was a margin it did not necessarily go the wrong way. The sum of £50 deducted in 1952 might also well be increased in view of the wider use of the "People's House" design, but in fact that figure remains unchanged. Again, when the subsidies were increased in 1952 they were back-dated to February, 1952, but now that they are being decreased they will not take effect until next April, which is a leeway of nine months. That is a fair point.

Mr. Sparks: If in fact the average capital cost, the notional value of the average house, is to fall as a result of the development of the "People's House," does not the hon. Gentleman realise that that adversely affects those authorities which can build flats only, and therefore there will be an increasing deficiency in their subsidy?

Mr. Deedes: There is a special rate for flats. In the course of the negotiations between the present Minister of Defence and the local authorities, an adjustment was made in the rate for flats.
Again, it has been widely suggested that this Order will have the effect of raising council rents. I make once again the point which has already been made by my hon. Friend the Member for Wolverhampton, South-West. The notional rent will increase from 18s. to 19s. on houses built after April next year. It seems to me perfectly fair to relate this figure to increased earnings, and 10 per cent. of earnings is a fair proportion. On average earnings of 197s. 8d. a week the figure of 19s. is inside rather than outside the margin.
My right hon. Friend will be meeting the local authorities in the course of events, but that does not mean that there will be any postponement now of this Order, which is based upon an established and agreed formula, and fulfils the aspiration, expressed from both sides of the House, that these subsidies should be reduced at the earliest opportunity. I commend the Order to the House.

Question put.

The House divided: Ayes, 251; Noes, 230.

Division No. 215.]
AYES
[7.20 p.m.


Allan, R. A. (Paddington, S.)
Gomme-Duncan, Col. A.
Medlicott, Brig. F.


Alport, C. J. M.
Gower, H. R.
Mellor, Sir John


Amery, Julian (Preston, N.)
Graham, Sir Fergus
Moore, Sir Thomas


Amory, Rt. Hon. Heathcoat (Tiverton)
Gridley, Sir Arnold
Morrison, John (Salisbury)


Anstruther-Gray, Major W. J.
Grimond, J.
Mott-Radclyffe, C. E


Arbuthnot, John
Grimston, Hon. John (St. Albans)
Nabarro, G. D. N.


Ashton, H. (Chelmsford)
Grimston, Sir Robert (Westbury)
Neave, Airey


Astor, Hon. J. J.
Hall, John (Wycombe)
Nicholls, Harmar


Baldock, Lt.-Cmdr. J. M.
Harden, J. R. E.
Nicholson, Godfrey (Farnham)


Baldwin, A. E.
Hare, Hon. J. H.
Nicolson, Nigel (Bournemouth, E.)


Banks, Col. C.
Harris, Fredric (Croydon, N.)
Noble, Comdr. A. H. P.


Barber, Anthony
Harris, Reader (Heston)
Nugent, G. R. H.


Barlow, Sir John
Harrison, Col. J. H. (Eye)
Oakshott, H. D.


Beach, Maj. Hicks
Harvey, Air Cdre. A. V. (Macclesfield)
Odey, G. W.


Bell, Ronald (Bucks, S.)
Harvey, Ian (Harrow, E.)
O'Neill, Hon. Phelim (Co. Antrim, N.)


Bennett, F. M. (Reading, N.)
Heald, Rt. Hon. Sir Lionel
Orr, Capt. L. P. S.


Birch, Nigel
Heath, Edward
Orr-Ewing, Charles Ian (Hendon, N.)


Bishop, F. P.
Henderson, John (Cathcart)
Orr-Ewing, Sir Ian (Weston-super-Mare)


Black, C. W.
Higgs, J. M. C.
Osborne, C.


Boothby, Sir R. J. G.
Hinchingbrooke, Viscount
Page, R. G.


Bossom, Sir A. C.
Hirst, Geoffrey
Partridge, E.


Boyd-Carpenter, Rt. Hon. J. A.
Holland-Martin, C. J.
Peake, Rt. Hon. O.


Boyle, Sir Edward
Hope, Lord John
Perkins, Sir Robert


Braine, B. R.
Hopkinson, Rt. Hon. Henry
Peto, Brig. C. H. M.


Braithwaite, Sir Albert (Harrow, W.)
Hornsby-Smith, Miss M. P.
Peyton, J. W. W.


Braithwaite, Sir Gurney
Horobin, I. M.
Pickthorn, K. W. M.


Bromley-Davenport, Lt.-Col. W. H.
Howard, Hon. Greville (St. Ives)
Pilkington, Capt. R. A.


Brooke, Henry (Hampstead)
Hudson, Sir Austin (Lewisham, N.)
Pitt, Miss E. M.


Brooman-White, R. C.
Hudson, W. R. A. (Hull, N.)
Powell, J. Enoch


Browne, Jack (Govan)
Hughes-Hallet, Vice-Admiral J.
Profumo, J. D.


Buchan-Hepburn, Rt. Hon P. G. T.
Hurd, A. R.
Raikes, Sir Victor


Bullard, D. G.
Hutchison, Sir Ian Clark (E'b'rgh, W.)
Ramsden, J. E.


Bullus, Wing Commander E. E
Hutchison, James (Scotstoun)
Rayner, Brig. R.


Burden, F. F. A.
Hyde, Lt.-Col. H. M.
Redmayne, M.


Butcher, Sir Herbert
Hylton-Foster, Sir H. B. H.
Rees-Davies, W. R.


Butler, Rt. Hon. R. A. (Saffron Walden)
Iremonger, T. L.
Remnant, Hon. P.


Campbell, Sir David
Jenkins, Robert (Dulwich)
Renton, D. L. M.


Carr, Robert
Johnson, Eric (Blackley)
Ridsdale, J. E.


Channon, H.
Johnson, Howard (Kemptown)
Roberts, Peter (Heeley)


Churchill, Rt. Hon. Sir Winston
Jones, A. (Hall Green)
Robinson, Sir Roland (Blackpool, S)


Clarke, Col. Ralph (East Grinstead)
Kaberry, D.
Robson-Brown, W.


Clark, Brig. Terence (Portsmouth, W.)
Keeling, Sir Edward
Rodgers, John (Sevenoaks)


Cole, Norman
Kerby, Capt. H. B.
Roper, Sir Harold


Colegate, W. A.
Kerr, H. W.
Ropner, Col. Sir Leonard


Conant, Maj. Sir Roger
Lambert, Hon. G.
Russell, R. S.


Cooper, Sqn. Ldr. Albert
Lambton, Viscount
Ryder, Capt. R. E. D.


Craddock, Beresford (Spelthorne)
Lancaster, Col. C. G.
Sandys, Rt. Hon. D.


Crookshank, Capt. Rt. Hon. H. F. C.
Leather, E. H. C.
Savory, Prof. Sir Douglas


Crosthwaite-Eyre, Col. O. E.
Legge-Bourke, Maj. E. A. H.
Scott, R. Donald


Crouch, R. F.
Legh, Hon. Peter (Petersfield)
Scott-Miller, Cmdr. R.


Crowder, Petrie (Ruislip—Northwood)
Lennox-Boyd, Rt. Hon. A. T.
Shepherd, William


Darling, Sir William (Edinburgh, S.)
Lindsay, Martin
Simon, J. E. S. (Middlesbrough, W.)


Davidson, Viscountess
Linstead, Sir H. N.
Smyth, Brig. J. G. (Norwood)


Davies, Rt. Hn. Clement (Montgomery)
Lloyd, Maj. Sir Guy (Renfrew, E.)
Snadden, W. McN.


Deedes, W. F.
Lloyd, Rt. Hon. Selwyn (Wirral)
Soames, Capt. C.


Digby, S. Wingfield
Lockwood, Lt.-Col. J. C.
Spearman, A. C. M.


Dodds-Parker, A. D.
Longden, Gilbert
Speir, R. M.


Donaldson, Cmdr. C. E. McA
Lucas, Sir Jocelyn (Portsmouth, S.)
Spence, H. R. (Aberdeenshire, W.)


Doughty, C. J. A.
Lucas, P. B. (Brentford)
Spens, Rt. Hon. Sir P. (Kensington, S.)


Duncan, Capt. J. A L.
Lucas-Tooth, Sir Hugh
Stevens, Geoffrey


Duthie, W. S.
McAdden, S. J.
Steward, W. A. (Woolwich, W.)


Eccles, Rt. Hon. Sir D. M.
McCorquodale, Rt. Hon. M. S.
Stewart, Henderson (Fife, E.)


Eden, J. B. (Bournemouth, West)
Macdonald, Sir Peter
Stoddart-Scott, Col. M.


Elliot, Rt. Hon. W. E.
Mackeson, Brig. Sir Harry
Storey, S.


Erroll, F. J.
McKibbin, A. J.
Strauss, Henry (Norwich, S.)


Fell, A.
Mackie, J. H. (Galloway)
Studholme, H. G.


Fisher, Nigel
Maclay, Rt. Hon. John
Sutcliffe, Sir Harold


Fletcher-Cooke, C.
MacLeod, John (Ross and Cromarty)
Taylor, William (Bradford, N.)


Ford, Mrs. Patricia
Macpherson, Niall (Dumfries)
Teeling, W.


Fort, R.
Maitland, Cmdr. J. F. W. (Horncastle)
Thomas, Rt. Hon. J. P. L. (Herelord)


Foster, John
Manningham-Buller, Rt. Hn. Sir Reginald
Thomas, Leslie (Canterbury)


Fraser, Hon. Hugh (Stone)
Markham, Major Sir Frank
Thomas, P. J. M. (Conway)


Fraser, Sir Ian (Morecambe &amp; Lonsdale)
Marlowe, A. A. H.
Thompson, Lt.-Cdr. R. (Croydon, W.)


Galbraith, T. G. D. (Hillhead)
Marples, A. E.
Thorneycroft, Rt. Hn. Peter (Monmouth)


Garner-Evans, E. H.
Marshall, Douglas (Bodmin)
Thornton-Kemsley, Col. C. N.


George, Rt. Hon. Maj. G. Lloyd
Maude, Angus
Touche, Sir Gordon


Glover, D.
Maudling, R.
Turner, H. F. L.


Godber, J. B.
Maydon, Lt.-Comdr S. L. C
Turton, R. H.







Tweedsmuir, Lady
Ward, Miss I. (Tynemouth)
Williams, R. Dudley (Exeter)


Vane, W. M. F.
Waterhouse, Capt. Rt. Hon. C.
Wilson, Geoffrey (Truro)


Vaughan-Morgan, J. K.
Webbe, Sir H. (London &amp; Westminster)
Wood, Hon. R.


Vosper, D. F.
Wellwood, W.



Wakefield, Edward (Derbyshire, W.)
Williams, Rt. Hon. Charles (Torquay)
TELLERS FOR THE AYES:


Walker-Smith, D. C.
Williams, Gerald (Tonbridge)
Sir Cedric Drewe and Mr. Wills


Wall, Major Patrick
Williams, Paul (Sunderland, S.)





NOES


Acland, Sir Richard
Hamilton, W. W.
Paling, Rt. Hon. W. (Dearne Valley)


Adams, Richard
Hannan, W.
Paling, Will T. (Dewsbury)


Albu, A. H.
Hargreaves, A.
Palmer, A. M. F


Allen, Arthur (Bosworth)
Harrison, J. (Nottingham, E.)
Pargiter, G. A.


Allen, Scholefield (Crewe)
Hastings, S.
Parker, J.


Anderson, Frank (Whitehaven)
Hayman, F. H.
Paton, J.


Attlee, Rt. Hon. C. R.
Healey, Denis (Leeds, S.E.)
Pearson, A.


Awbery, S. S.
Henderson, Rt. Hon. A. (Rowley Regis)
Peart, T. F.


Bacon, Miss Alice
Herbison, Miss M.
Plummer, Sir Leslie


Balfour, A.
Hewitson, Capt. M.
Popplewell, E.


Barnes, Rt. Hon. A. J.
Hobson, C. R.
Porter, G.


Bartley, P.
Holman, P.
Price, J. T. (Westhoughton)


Bellenger, Rt. Hon. F. J.
Houghton, Douglas
Proctor, W. T.


Bence, C. R.
Hoy, J. H.
Pryde, D. J.


Benn, Hon. Wedgwood
Hubbard, T. F.
Rankin, John


Benson, G.
Hudson, James (Ealing, N.)
Reeves, J.


Beswick, F.
Hughes, Emrys (S Ayrshire)
Reid, Thomas (Swindon)


Bevan, Rt. Hon. A. (Ebbw Vale)
Hughes, Hector (Aberdeen, N.)
Reid, William (Camlachie)


Blackburn, F.
Hynd, H. (Accrington)
Rhodes, H.


Blenkinsop, A.
Hynd, J. B. (Attercliffe)
Richards, R.


Blyton, W. R.
Irving, W. J. (Wood Green)
Roberts, Albert (Normanton)


Boardman, H.
Isaacs, Rt. Hon. G. A.
Roberts, Goronwy (Caernarvon)


Bottomley, Rt. Hon. A. G.
Janner, B.
Robinson, Kenneth (St. Pancras, N.)


Bowles, F. G.
Jay, Rt. Hon. D. P. T.
Rogers, George (Kensington, N.)


Brockway, A. F.
Jeger, George (Goole)
Ross, William


Brook, Dryden (Halifax)
Jenkins, R. H. (Stechford)
Shackleton, E. A. A.


Broughton, Dr. A. D. D.
Johnson, James (Rugby)
Short, E. W.


Brown, Rt. Hon. George (Belper)
Johnston, Douglas (Paisley)
Shurmer, P. L. E.


Brown, Thomas (Ince)
Jones, David (Hartlepool)
Silverman, Julius (Erdington)


Burke, W. A.
Jones, Frederick Elwyn (West Ham, S.)
Silverman, Sydney (Nelson)


Burton, Miss F. E.
Jones, Jack (Rotherham)
Simmons, C. J. (Brierley Hill)


Butler, Herbert (Hackney, S.)
Jones, T. W. (Merioneth)
Slater, Mrs. H. (Stoke-on-Trent)


Callaghan, L. J.
Kenyon, C.
Slater, J. (Durham, Sedgefield)


Carmichael, J.
Key, Rt. Hon. C. W.
Smith, Norman (Nottingham, S.)


Champion, A. J.
King, Dr. H. M.
Snow, J. W.


Chapman, W. D.
Lawson, G. M.
Sorensen, R. W.


Chetwynd, G. R.
Lee, Frederick (Newton)
Soskice, Rt. Hon. Sir Frank


Clunie, J.
Lee, Miss Jennie (Cannook)
Sparks, J. A.


Coldrick, W.
Lever, Harold (Cheetham)
Steele, T.


Cove, W. G.
Lever, Leslie (Ardwick)
Stewart, Michael (Fulham, E.)


Craddock, George (Bradford, S.)
Lipton, Lt.-Col. M.
Strachey, Rt. Hon. J.


Crossman, R. H. S.
MacColl. J. E.
Strauss, Rt. Hon. George (Vauxhall)


Daines, P.
McGhee, H. G.
Stross, Dr. Barnett


Dalton, Rt. Hon. H.
McKay, John (Wallsend)
Summerskill, Rt. Hon. E.


Darling, George (Hillsborough)
McLeavy, F.
Swingler, S. T.


Davies, Ernest (Enfield, E.)
MacMillan, M. K. (Western Isles)
Sylvester, G. O.


Davies, Harold (Leek)
MacPherson, Malcolm (Stirling)
Taylor, Bernard (Mansfield)


Delargy, H. J.
Mallalieu, E. L. (Brigg)
Taylor, John (West Lothian)


Dugdale, Rt. Hon. John (W. Bromwich)
Mallalieu, J. P. W. (Huddersfield, E.)
Thomas Ivor Owen (Wrekin)


Ede, Rt. Hon. J. C.
Mann, Mrs. Jean
Thomson, George (Dundee, E.)


Edwards, Rt. Hon. John (Brighouse)
Manuel, A. C.
Timmons, J.


Edwards, W. J. (Stepney)
Marquand, Rt. Hon. H. A.
Tomney, F.


Evans, Albert (Islington, S.W.)
Mason, Roy
Turner-Samuels, M.


Evans, Edward (Lowestoft)
Mayhew, C. P.
Ungoed-Thomas, Sir Lynn


Fernyhough, E.
Mellish, R. J.
Viant, S. P.


Fienburgh, W.
Messer, Sir F.
Wallace, H. W.


Finch, H. J.
Mikardo, Ian
Warbey, W. N.


Fletcher, Eric (Islington, E)
Mitchison, G. R.
Webb, Rt. Hon. M. (Bradford, C.)


Follick, M.
Monslow, W.
Weitzman, D.


Foet, M. M.
Moody, A. S.
Wells, Percy (Faversham)


Forman, J. C.
Morgan, Dr. H. B. W.
Wells, William (Walsall)


Fraser, Thomas (Hamilton)
Morley, R.
West, D. G.


Freeman, Peter (Newport)
Morris, Percy (Swansea, W.)
Wheeldon, W. E.


Gaitskell, Rt. Hon. H. T. N.
Mort, D. L.
White, Mrs. Eirene (E. Flint)


Gibson, C. W.
Moyle, A.
White, Henry (Derbyshire, N. E.)


Gooch, E. G.
Mulley, F. W.
Whiteley, Rt. Hon. W.


Gordon Walker, Rt. Hon. P. C.
Murray, J. D.
Wilcock, Group Capt. C. A. B.


Greenwood, Anthony
Neal, Harold (Bolsover)
Wilkins, W. A.


Grey, C. F.
Noel-Baker, Rt. Hon. P. J.
Willey, F. T.


Griffiths, David (Rother Valley)
Oliver, G. H.
Williams, David (Neath)


Griffiths, Rt. Hon. James (Llanelly)
Orbach, M.
Williams, Rev Llywelyn (Abertillery)


Hale, Leslie
Oswald, T.
Williams, Ronald (Wigan)


Hall, Rt. Hon. Glenvil (Colne Valley)
Padley, W. E.
Williams, Rt. Hon. Thomas (Don V'll'y)


Hall, John T. (Gateshead, W.)
Paget, R. T.
Williams, W. R. (Droylsden)







Williams, W. T. (Hammersmith, S.)
Winterbottom, Richard (Brightside)



Willis, E. G.
Woodburn, Rt. Hon. A.
TELLERS FOR THE NOES:


Wilson, Rt. Hon. Harold (Huyton)
Wyatt, W. L.
Mr. Bowden and Mr. Holmes


Winterbottom, Ian (Nottingham, C.)
Yates, V. F.

Resolved,
That the Draft Housing (Review of Contributions) Order, 1954, a copy of which was laid before this House on 12th July, be approved.

INTERNATIONAL ORGANISATIONS (IMMUNITIES AND PRIVILEGES)

7.31 p.m.

The Joint Under-Secretary of State for Foreign Affairs (Mr. R. H. Turton): I beg to move,
That an humble Address be presented to Her Majesty, praying that the International Organisations (Immunities and Privileges of the Council of Europe) (Amendment) Order, 1954, be made in the form of the draft laid before this House on 12th May.
With your permission, Mr. Speaker, and with the leave of the House, I should like to take this and the following eight Orders together. They raise similar points, and I shall, if that course is permitted, explain the differences as I speak.

Sir Frank Soskice: We on this side have individual points to take up on several of the Orders. There are, as the Joint Under-Secretary has said, nine of them. Speaking for myself, I should have thought that it would be for the convenience of the House if they were all taken together so that we could make our points in the course of the debate.

Mr. Speaker: I think that that course will probably commend itself to the House. I am always glad to agree to any process which it is considered will expedite business.
I would point out that all these Orders are founded on a statute passed by this House, the International Organisations (Immunities and Privileges) Act. In the course of a general discussion it would be quite permissible to discuss the Orders in general, but of course the statute itself is an Act of Parliament, and the principles laid down in it would not properly arise on the individual Orders.

Mr. Turton: I apologise to the House for the fact that my first intervention in my new office should be to present such a formidable array of Orders, which are themselves of such a complicated character and deal with matters extending

in history over a period that goes outside the lifetime of the present Parliament. If, in presenting these Orders, I lack any clarity in my exposition, I hope that the House will grant me the customary indulgence and allow me to clear up any points which hon. Members may wish to raise in the course of the debate, and any points which I have left obscure in my speech, at the end of the debate.
Her Majesty's Government submit for the approval of the House seven new Orders in Council and two amendments to existing Orders in Council which it is proposed to make under the International Organisations (Immunities and Privileges) Act, 1950. The House will recollect that Section 6 of that Act provides that Orders made under it should be laid before Parliament in draft, and should not be submitted to Her Majesty except in pursuance of an Address presented by each House praying that the Orders in Council be made.
The draft Orders in Council which have been laid before both Houses of Parliament are designed to fulfil certain obligations which Her Majesty's Government have undertaken or desire to undertake as a result of their membership of the following organisations: first, the Council of Europe; second, the European Payments Union; third, the International Civil Aviation Organisation; fourth, the International Telecommunication Union; fifth, the North Atlantic Treaty Organisation; sixth, the Universal Postal Union; seventh, the World Meteorological Organisation; eighth, the Customs Co- operation Council; and ninth, the International Sugar Council.
The purpose of these Orders in Council is to permit the authorities in the United Kingdom to grant to these international organisations and their personnel treatment similar to that which other countries already grant. If I might divide these nine Orders, I would point out that two of them, as I have said, amend existing Orders in Council; three of them deal with Specialised Agencies of the United Nations—and the House will remember that under the International Convention adopted by the General Assembly of the


United Nations on 21st November, 1947, and ratified by us in 1949, we agreed to grant privileges and immunities to certain personnel from those Specialised Agencies. Of the remaining four, two are in effect ratifying agreements which we have made, and two are fulfilling undertakings which we have made in agreements that have already been ratified.
Before dealing with these Orders in detail, I should like to make three general remarks on them. First, I think it is important that this country, which since the war has taken such a leading part, under successive Governments, in negotiations for the establishment of these international organisations, should carry out in full all her obligations in these respects. Secondly, there is a further, slightly less altruistic, consideration. It is, I submit, in the interests of this country to give these international organisations every incentive to hold their meetings in the United Kingdom and to establish their headquarters here. So long as they are uncertain whether their officials will enjoy the same conditions as those afforded by other countries these international organisations may be deterred from coming to this country.
London is rightly regarded by us as especially suited for this purpose. We hold it to be, and the history of the recent London Conference is strong evidence in support of our belief, the natural centre of effort to all international co-operation. I claim, therefore, the approval of these Orders as being in the interest both of national prestige and of the inflow of foreign currency.
My final general observation is this: I must begin it with an apology, which I hope the whole House will accept. There has been considerable delay in the presentation of these Orders. One Order, in particular, dates back to 1949. Through an oversight, this Order was not presented in the time of our predecessors or in the earlier years of this Parliament, that is the third Order, the amending Order regarding the International Civil Aviation Organisation. May I say in extenuation that before the Orders are presented considerable consultation between various Departments is necessary, and this machinery inevitably takes time?
Still, I accept on behalf of Her Majesty's Government our responsibility

for our share of this delay, which was adversely commented upon in the Third Report of the Committee on Public Accounts. It is in compliance with the assurance given to the Public Accounts Committee that these Orders are brought together before the House tonight. I will give this undertaking, that every endeavour will be made in the future to avoid any repetition of this delay.
I now turn to the detailed consideration of the individual Orders. The first Order is the Immunities and Privileges of the Council of Europe (Amendment) Order. This is required to enable Her Majesty's Government to ratify the Protocol signed at Strasbourg on 6th November, 1952, which amends the provisions of the General Agreement on Privileges and Immunities of the Council of Europe signed at Paris on 2nd September, 1949. The General Agreement was ratified by Her Majesty's Government on 29th September, 1950, and came into force on 10th September, 1952.
The amending Protocol has two purposes. First the practice since the Council of Europe was established has shown that preparatory and working committees or sub-committees are necessary for the efficient despatch of the work of the Committee of Ministers and the Consultative Assembly. No provision relating to representatives attending such committees or sub-committees was made in the General Agreement and the Protocol, when it is ratified, will make the necessary amendments to the Agreement. Secondly, permanent representatives of member Governments to the Council of Europe have now been appointed, and the Protocol requires that diplomatic privileges and immunities should be conferred upon them. As the seat of the permanent representatives is at Strasbourg, it is doubtful if any of the privileges and immunities would be claimed by them.
The second Order deals with Immunities and Privileges of the European Payments Union, and is required to enable Her Majesty's Government to ratify the Agreement for the establishment of a European Payments Union which was concluded at Paris on 19th September, 1950. Article 24 of the Agreement pro-


vides for the grant of certain privileges and immunities to the Union and to its funds and assets. The Agreement can come into force only on ratification of all the signatories, but by a Protocol of Provisional Application bearing the same date the signatories undertook to apply its provisions in advance of ratification.
The House will recollect that now the Secretary of State for Foreign Affairs, with my right hon. Friend the Chancellor of the Exchequer as his alternate, holds the chair of the Council of the Organisation for European Economic Cooperation which controls the European Payments Union. It is therefore, I submit, most desirable that Her Majesty's Government should be able to regularise their position by the ratification of the European Payments Union Agreement. All that the present Order does is to give the Union immunity from suit and legal process and exemption from taxation in respect of its property. In the present circumstances, that is all that is necessary.
The third Order deals, as I have mentioned, with the International Civil Aviation Organisation, and is an amending Order. It enables Her Majesty's Government to fulfil all their obligations under the Convention of the Privileges and Immunities of the Specialised Agencies to which they acceded in August, 1949. Her Majesty's Government are committed to accord privileges and immunities to representatives of member Governments of the Organisation attending its Assembly and executive body, also to any Commission provided for in its Constitution and also to any committee of either of these two bodies. The original Order made provision only for representatives of member Governments to the Council of the Organisation, and therefore it is necessary to have an amending Order in order to include members of the committees. It is noticeable, as I mentioned before, that in this respect it is regretted that Her Majesty's Government have, in effect, been in breach of their obligation since 1949.
I ought, in order to make it clear, to take the Orders, four, six and seven, together, because they are Specialised Agency Orders, and the same points arise under the Telecommunications Union, the U.P.U. and the World Meteorological

Organisation. These are required to enable Her Majesty's Government to notify the Secretary General of the United Nations, in accordance with Section 43 of the Convention on Privileges and Immunities for the Specialised Agencies of the United Nations, that they undertake to apply the provisions of the Convention to the three bodies concerned.
It is the view of Her Majesty's Government that it is their duty to accede to this Convention in respect of these Specialised Agencies not previously provided for. The United Kingdom is a member of all these Agencies, and it would be improper for Her Majesty's Government to enjoy the advantages of membership without granting to them the privileges and immunities which have been approved for them.
The fifth Order is that relating to the North Atlantic Treaty Organisation. In this case the purpose of the Order is to enable Her Majesty's Government to ratify the Agreement on the status of the North Atlantic Treaty Organisation signed at Ottawa on 20th September, 1951. The Agreement has already been ratified by eight signatory Governments and came into force with the instrument of ratification on 18th May, 1954.
The Order is broadly similar to Orders in Council previously made in respect of the International Organisation. It will, however, be noted that those parts of this Order relating to Income Tax exemptions are retrospective to 30th September, 1951. This is because when the Agreement was signed the North Atlantic Council deputies adopted a resolution recommending that signatory States should give effect to the Agreement provisionally to the greatest extent possible. Moreover, the salaries of the North Atlantic Treaty Organisation civilian staff were fixed with our concurrence at a scale which assumed that they would not be liable to Income Tax in the United Kingdom. There is, therefore, a strong obligation to make this Order retrospective as regards Income Tax as laid down in the Order.
The eighth Order deals with the Customs Co-operation Council and is to enable Her Majesty's Government to fulfil their obligations under Article XIII and the Annexe to the Convention establishing the Customs Co-operation Council signed at Brussels on 15th December, 1950. The Convention was


ratified by Her Majesty's Government on 12th September, 1952, and it came into force on 4th November, 1952. The Order is substantially similar to other Orders in respect to similar organisations, but the exemption from Income Tax granted to other officials of the Council by Article 12 (b) of the draft Order is made retroactive from 4th November, 1952, in order to make provision for the exemption from Income Tax of salaries already paid since the Convention came into force. Without such a provision, without this Order, Her Majesty's Government would be in breach of the obligations assumed by them as parties to the Convention.
Finally, I come to the International Sugar Council Order. This is required to enable Her Majesty's Government to fulfil their obligations under Article 27 (6) and Article 38 (6) of the International Agreement for the Regulation of the Production and Marketing of Sugar signed at London in October, 1953. The seat of the International Sugar Council is established by that Agreement in London. The Agreement provides for the accord of Her Majesty's Government to the International Sugar Council of such legal capacity as may be necessary for the discharge of its functions, and, furthermore, for the exemption from taxation of the funds of the Council and of the remuneration paid to those of its employees who are not citizens of the United Kingdom or Colonies. The Order fulfils our obligations in these respects. It does not give Income Tax exemption to those who are citizens of the United Kingdom or the Colonies.
In conclusion, I repeat the undertaking which I gave at the beginning, that I shall be happy to reply at the end of the debate to any points that are raised and to explain any obscurities. I have to assist me my hon. and learned Friend the Solicitor-General who will be prepared to deal with any questions that are essentially legal in character and which would be beyond the wit of the Foreign Office.

7.51 p.m.

Sir Frank Soskice: It is a very pleasant task to have to welcome to his new appointment the present Minister. It is a task which I discharge with great pleasure, especially

as he was a member of my own college in Oxford many years ago. The whole House will be grateful to him for having performed the duty of explaining these complicated matters with the lucidity which he displayed.
There are nine Orders. Each contains a great many provisions all of which are of importance to the ordinary citizens of the country who do not get the privileges and immunities which the Orders confer upon a limited and privileged few. At the outset I should like to express my own personal agreement with a number of the Minister's general observations on the situation.
As the world progresses and the efforts at international co-operation become more extended, we should do all that we can to further those efforts. Where it may be shown that it is necessary for the proper functioning of international organisations that special privileges should be conferred, we should be ready to confer those privileges and possibly, in an effort to further general good will among nations in this very troubled and distracted world, we should be prepared to err—not too much but to some extent —on the side of generosity. Nevertheless, we should watch very carefully what we are doing in this respect.
It must be remembered that whenever we confer a privilege on some member of these manifold organisations we are, correspondingly, infringing the rights of other citizens who may be affected by their actions. I shall call attention to some of the provisions of the Orders which would seem, if I read them aright, to have the result that a person of this country injured by the negligent driving of these various privileged individuals, in motor cars, for example, may have absolutely no redress. The hon. and learned Gentleman the Solicitor-General will perhaps be able to assist upon this. It may be that it is inevitable, for the reasons which the 'Minister explained, that these privileges should be conferred. I recognise at once that the Government to which I belonged entered into many of the agreements which have given rise to these Orders, just as the present Government have.
Therefore, to the extent that privileges have been given in too large a measure, if that is the case, it is a fault which is


incumbent upon both sides of the House. I hope that the Minister can assure us and that the Solicitor-General can confirm that each of them is personally satisfied, from his researches and the advice of the expert advisers, that the privileges conferred by the Orders do not in any material respect go beyond the obligations which either the present Government or the previous Government assumed in the various agreements which are being implemented.
The number of Orders is formidable. There are no fewer than nine before us now. It is right to ask the Minister, with a view to giving some idea to the House and to the general public, how many persons in this country can lay claim to these various privileges, large and small. What is the approximate number of persons who may drive motor cars with impunity in the streets of our country without, as far as I can understand, fearing criminal or civil processes as a result of negligent or dangerous driving? Perhaps the Minister would be good enough to give some idea of how many motor cars we should look out for and keep out of the way of when we move about the streets.

Mr. Sydney Silverman: All of them.

Sir F. Soskice: I agree, but I should like to know the approximate number of people who may drive motor-cars without fear of legal consequences as a result of negligence or dangerous driving. Obviously the Minister cannot give me an exact figure, but I should be obliged if he would give a general indication of the extent to which these privileges are conferred.
Those are the general observations. I am broadly in sympathy with the purpose of the Orders and I do not approach the matter in any sense of hostility. These privileges have to be conferred, in proper cases, and probably the whole House, once it is convinced of the necessity in any individual case of giving those privileges, will readily give them. Hon. Members are anxious to know the scope of the immunity which those who enjoy the privileges possess.
I wish to make some observations about some of the Orders. I hope that the Minister will be able to satisfy us

on these matters. My first observation is about the Universal Postal Union. The Order which is before us is one which, so far as I can ascertain from my researches, is very nearly identical, if not quite identical, with an Order which was brought before the House by the last Socialist Government. The late Government brought this identical, or nearly identical, Order before the House in July, 1950.
When it went before another place some criticisms were directed to that Order. They were searching and penetrating criticisms which I do not suggest were in any way unjustified. As a result the Lord Chancellor in that Government thought it right to ask permission to withdraw the Order which was before the House and, in consequence, that Order was withdrawn. Those criticisms, to which I shall advert in a few moments, are criticisms which apply fairly generally to most of the Orders because they arise on wording which appears in a number of them in almost identical form.
The criticisms were directed against the Order and the Lord Chancellor asked permission to withdraw it, and he did. Somewhat over four years have elapsed and we now find the present Government introducing the self-same Order which was subjected to such violent criticism. I do not say that it was over-violent or unjustified criticism but it was searching, penetrating, strict and rigid criticism from Members in the other House of the party to which the Minister belongs. I hope that the Minister will be able to satisfy us that there is a perfectly good reason for that change of heart.
I had hoped that when the Order was reintroduced by the present Government it would be stripped of those objectionable features which gave rise to the strictures which led to its withdrawal in July, 1950. So far as I can tell, however, these objectionable features are still present. As they are features which appear very generally in most of the Orders, perhaps it will not be unduly taking the time of the House if I refer to one or two of them.
I take, for example, the case of the driving of motor-cars. After all, motorcar driving is an occupation which takes some considerable time of most of our citizens. Article 10 of the Order deals


with "Other officials of the Union." We are not dealing here with the organisation as a whole, with representatives of high standing or leading lights in the Union; we are simply dealing with persons who are lumped together in the article under the heading of "Other officials of the Union."

Mr. Turton: Is it Article 9?

Sir F. Soskice: I am dealing with Article 10. Article 9 is in similar form. The point made in another place, which seems to have force, is applicable to Article 10, which says that the other officials of the Union are to have:
…immunity from suit and legal process in respect of words spoken or written and things done or omitted to be done by them in the course of the performance of their official duties.…
I suppose that if one of them is driving a car—I do not know why we harp so much on cars, but perhaps it is because our streets are so full of them—and goes on the pavement and runs over an old lady, nothing can be done about it. That was pointed out before, and it seems to me that that criticism can still be made against the article. I should like to know why the Order now reappearing before us does not have another garb, and why it has not been toned down to some extent if that is possible.
It may be that in the case of some of these Orders the Government are bound by agreements which have been entered into. However, I am sure that the Minister will agree that this Order relating to the Universal Postal Order—

Mr. Turton: It is the Universal Postal Union.

Sir F. Soskice: I am obliged to the hon. Gentleman. That is the sort of thing that one dreams about. When it appears before us again in its present form, the Order still has this objectionable feature. I hope the Minister will be able to say why this must be so. We are not bound to agree to the Order and the Government are not bound in honour—I hope I shall be corrected if I am mistaken—to accord this privilege to the Union.
I would, in general, ask, as was asked in another place in July, 1950, whether it is really necessary for the Universal Postal Union to have these privileges conferred upon its officials. The Union has

been in operation for 75 or 76 years and over the whole of that time its officials have not enjoyed the privileges which are now being conferred upon them. Why should they now have them? I am not necessarily saying that they should not have them, but I am asking the Minister to give us a rather fuller reason why, after 75 years of very useful existence in which it has functioned to the greatest advantage and benefit of mankind as a whole, the Union should at long last find it difficult to carry on its labours unless these privileges are conferred upon its officials. I do not put this forward in a hostile spirit; I ask for some further information to show that there has been a change in circumstances which now justifies the bringing forward of what was so severely attacked when it was brought forward in July, 1950, by the late Government.
The next Order to which I wish to refer is that relating to N.A.T.O. I appreciate that it is an Order to give effect to an agreement signed at Ottawa in 1951, and I accept that it is necessary, proper and beneficial to implement the provisions of that agreement. However, two special considerations arise on that Order.
The Minister has apologised—I am sure the House will accept his apology in the sense in which it was offered—for the delay which has occurred in the placing of a number of the Orders before the House. However, I am not sure, to use a colloquialism, that he should be allowed to get away with it as easily as that. I call the attention of the House to the very severe comment made in the Third Report of the Select Committee on Public Accounts for the Session 1953–54 with regard to the hon. Gentleman's own Department in relation to this Order. I refer the House to paragraphs 5 to 7 of the Report where, to summarise the relevant contents, it is pointed out that the Inland Revenue have been giving exemption from Income Tax to some 200 individuals who are officials of that Organisation from 1st July, 1951. I agree that that goes back to times just before the decline and fall of the late Government, but a long time has elapsed since then, and the Select Committee on Public Accounts obviously takes a very serious view of it. I think it is right to point out that the situation is made worse by the fact that it is stated in the Report


that the Inland Revenue made repeated and urgent representations to the Foreign Office about it. The Committee says that it is a serious situation, and I think that the House ought to take note of that.
The Minister is, of course, bound to come here and say that he is sorry and that it will not be done again. It is not the Minister's fault; he has only just arrived at the Foreign Office. Nevertheless, it is a very serious situation if for about four years the Inland Revenue have made representations about unauthorised exemptions from Income Tax in respect of some 200 persons—I do not know how much is involved—and no heed has been taken of their representations until the present time.
The matter is still more complicated. As I read the Second Report of the Select Committee on Statutory Instruments, the exemption to which the Minister referred as having been granted from 9th September, 1951, by the terms of the Order relating to N.A.T.O. is said by that Committee to be, in any case, ultra vires. The Foreign Office, if it has fallen into serious error, if it is guilty of a grievous lapse and wishes to grant statutory authority to an exemption from Income Tax which has been granted for some four years past, should have taken the appropriate steps and put the lapse right by amendment of a statute. If the Report of the Select Committee is right, the Foreign Office has apparently sought to do that by an Order and has done it ultra vires.
I do not know whether in these circumstances the Minister is still going to ask the House to approve the Order. I can only say that the situation is an extremely regrettable one. It shows really shocking mishandling on the part of a Department over a long period of time. It is a situation which, from the point of ordinary legislative procedure and good order, is quite deplorable. The Minister ought seriously to consider whether he is going to ask the House to approve an Order with this serious blemish in it which really amounts to a kind of hole-and-corner way of covering up a serious lapse for which the Minister agrees there is really no serious kind of excuse.
I do not desire to refer in much detail to the other Orders. I would, however, say that the same Report by the Select

Committee on Statutory Instruments makes the same comment with regard to another Order. All the Orders, or a very large number of them, are very late, and one of them has been drafted in such a way as not to comply with the Statute, and another has been stated to be ultra vires—that one which relates to the Customs. There again, there is apparently an intention to grant retrospective exemption to other officials in respect of Income Tax, and that again, as the Report of the Select Committee says, is out of order. Really, that is pretty rough treatment, and not what we expect from the Government in the matter.
All these Orders are made under powers delegated to the Government by statute, which obviously ought to be very carefully exercised. If we are to have Governmental errors resulting in two out of nine Orders being ultra vires, it reflects not very highly on the competence of those who advise the Government and on the Ministries who act upon that advice. I think the Minister ought seriously to consider whether he will still ask the House tonight to approve the Order relating to the Customs Co-operation Council, in view of the fact that this Order transgresses the statute and purports to exercise a power which nobody has conferred upon the Government.
One could spend a great deal of time going through the various provisions of these Orders and pointing out the consequences which the exercise of the privileges which they confer may have on the ordinary citizen. For example, I have already referred to immunity in respect of words spoken. It may well be said that in some committees, perhaps indeed most committees, there should be protection against the law of libel. I have raised the question whether it is necessary to have that kind of privilege in the case of the International Telecommunication Union, and perhaps the Minister will say why it is necessary to accord it to an organisation of that sort or to the World Meteorological Organisation. Perhaps, in some organisations which deal with highly controversial matters some such protection is necessary, but the words are very widely drawn. The Order says:
(a) immunity from suit and legal process in respect of words spoken or written
and so on. It is true that that is qualified by the fact that it is provided that these


things must be done in the course of the performance of their official duties, but is it necessary to go quite as wide as that? Do the agreements which these Orders implement require the whole measure of that privilege to be conferred? It could mean that officials of the body in question might be walking along a street or sitting in a restaurant in conversation, and that all that they would have to do would be to say that they were discussing official topics and they would have conferred upon them immunity in respeq of anything they happened to say in the course of their conversation.
Perhaps the Solicitor-General will be able to help us. If, under this Government or the last Government, we promised by agreement to confer not less than that privilege, so be it, but the House will certainly wish to be assured that the Government have very carefully studied the question whether that kind of privilege is one which goes beyond the strict letter of the agreement which the Government are bound to implement in relation to the organisations in question.
I have called attention to some aspects of these Orders, and I feel sure that many of my hon. Friends who are very interested will call attention to other aspects. Speaking for myself, I should advise my hon. Friends not to divide against the Orders. I hope the Minister will be able to tell us the answers to some of these questions, and we reserve our position in case of no reasonable explanation being forthcoming in the case of the Universal Postal Union. We do not finally commit ourselves, but, subject to a reasonable explanation, I think it probable that my hon. Friends would think it right to agree that the Government should have these Orders.
I think we are entitled to call upon the Minister to supplement what he said by giving us more convincing reasons why these very extensive privileges in these Orders should be granted and to assure us that those privileges do not go one whit beyond what is necessary or has been covenanted for. In the case of the organisations where there does not seem to us to be a prima facie case, there is perhaps some reason of which we are unaware, but we will certainly listen to a statement of what that reason is. My

hon. Friends will want to suspend judgment until they have heard the Minister or perhaps the Solicitor-General, if the latter is to intervene in the debate, and if either of them gives us a satisfactory reason, we would not wish to divide the House.

8.16 p.m.

Mr. Charles Fletcher-Cooke: I should like to ask two or three questions of my hon. Friend, because I did not hear all of his speech, being out of the Chamber for part of it.
To what extent are we blazing the trail here? What other nations have agreed to these various international instruments and have also written into their domestic law the very considerable privileges we are asked to write into our domestic law? That seems to me to be a very pertinent question. It is difficult to go through all these Orders because they operate at different times and affect different countries, but there is no obligation upon this country to do more than other countries are doing in the matter. I should therefore like to know to what extent other countries are following the same course.
Secondly, I wish to protest against the view that, because the Government signed these agreements, we are in some sense morally pledged to ratify them in this House. In my submission, we should in some way be shirking our responsibility if we were to allow that theory to be spread about. After all, it is well known in international law that, when Her Majesty's Government sign an international instrument which affects our domestic affairs, it must be subject to the Parliament of this country passing the necessary law, and the promise given is a promise which is always subject to that condition. Therefore, it is not right for us to be told that we must pass these Orders because the Government have promised to enact them. The Government have promised no more than that they will submit them to the supreme legislative body for approval or disapproval, as the case may be. Therefore, we are entitled to reject these Orders if we think fit, without being accused of breaking Britain's word.
The third point is one of detail. The origin of diplomatic privilege was not the privilege of the diplomats, and certainly not that of the first or second secretary or the junior diplomat, but the privilege of


the sovereign who was represented. The sovereign could waive the privilege of the diplomats, and that, I think, is reflected in these Orders to a great extent. The foundation of this matter is that it is necessary for the proper conduct of these people that they should have these extraordinary privileges while they are at work because they could not do their work without them. That is the theory. If that is so, why are these privileges not extended to British subjects who are in this country working for the Sugar Council, the Telecommunication Union, or whoever it is? Why does not the theory apply to British subjects as much as to anybody else?
I have here the proposed Order relating to the International Telecommunication Union. In Section B is a whole series of privileges, not merely tax privileges. I can understand the reason for not making exceptions for British subjects in that case. There are all sorts of other things which the representatives, other than representatives of Her Majesty's Government, on organisations or committees in the United Kingdom will get. For example, they have
immunity from personal arrest or detention and from seizure of their personal baggage and inviolability for all papers and documents.
They have also
Immunity from legal process.
This applies not only to the representatives themselves. The Order states:
For the purposes of the application of this Article the expression 'representatives' shall be deemed to include, in addition to the representatives, the following members of their official staffs accompanying them as such representatives:—

Alternate representatives,
Advisers,
Technical experts,
Secretaries of Delegations."

There is a whole host of people included as well as the representatives. If it is necessary for all these technical experts to have their personal baggage free from seizure in the United Kingdom—and I have no doubt it is—why should that not apply to British technical experts as well? What is in a British technical expert's baggage that makes it more seizable? Why should British subjects when working for the Sugar Council or the Telecommunication Union be liable

to have their papers seized, while non-British subjects are not? It seems an extraordinary discrimination and rather makes one doubt whether these privileges are necessary for the conduct of the job. If they are necessary for one, they are necessary for the other. Out of their own mouths, the Government have said that the privileges are not necessary for British secretaries and experts.
It is only in a qualified way that one can support these documents. I do not think there is anything in the argument that because the British Government have entered into these agreements there is some moral obligation on the Legislature to pass them. That is completely contrary to the spirit of negotiation of international instruments which require domestic legislation for their domestic enforcement. That argument does not weigh with me at all. What would weigh with me is if I were told that other countries have done these things not merely in name but have, in fact observed these privileges that it is agreed that all should have.
My own experience is that other countries frequently say that they have observed these treaties. They publish them sometimes in their official gazettes, which is often sufficient to give them the force of domestic law, but in practice the treaties are disregarded. It would be invidious for me to name any names, but hon. Members on both sides of the House have probably experienced in other countries that the privileges which are supposed to be accorded do not amount to very much. When we confer these very great privileges they do amount to something; they amount to what they say. That is another reason why we should not be particularly forward in granting privileges which our own people who serve on international bodies abroad do not enjoy.

8.24 p.m.

Mr. Sydney Silverman: I hope that the Joint Under-Secretary of State will not think it an impertinence on my part if I add my congratulations to those of my right hon. and learned Friend on his promotion to his present office. He will remember that we came into the House together quite a number of years ago, and if during all that time we have not shared an idea or a


vote, that is something about which the hon. Gentleman is more to be condoled with than otherwise.
We can approach this matter of the Orders in either of two moods. One is to say: "Let us grant such immunities as are strictly necessary to the performance of the jobs that have to be done, but grant nothing further or wider than that." That is the view which the hon. Member for Darwen (Mr. Fletcher-Cooke) favoured in his speech. The other is to say: "Why bother with narrow limitations? If we are to give what is accepted as a necessary immunity, let us do it generously and widely. We gain more by doing it that way than we shall lose." I confess that I prefer the second mood to the first.
I do not think it is valid to say, although it may be logical: "If we except all foreign citizens doing this job, then we ought to except our own citizens, too." That is not quite the point. The immunity is to enable the foreign citizen to discharge his function freely without fear of the inhibitions, interferences or preventive activities of the Government of the country in which he happens to be discharging his function, which interferences might be exercised in good faith or might not. We cannot help keeping our own citizens subject to our own laws but it is contended that we ought not to do that in the case of people who are not following our purposes solely, and certainly not their own individual purposes, but are discharging an international purpose.

Mr. Fletcher-Cooke: Let me follow that up. Would the hon. Member agree that it would be right for the United States to treat American employees of the United Nations who are working in New York more severely than they treat employees who happen to be citizens of other countries?

Mr. Silverman: The hon. Gentleman must not provoke me, or I might find myself making the kind of speech which I am tempted to make, and perhaps I might find myself in conflict with the Chair. I am indicating a personal preference. I do not want to argue it further or seek to establish one as preferable to the other, because that is not necessary for the purpose for which I intervened in the debate.
It seems to me that in modern conditions we are developing a kind of international civil service. I do not think that the idea of world government is yet in operation, but something of the principle of world government in liberties and agreed fears is certainly in operation, and it is quite clear that we cannot discharge those functions unless we have a skilled civil service of complete integrity and complete independence. If they are to feel themselves quite free from arbitrary interference on grounds which have nothing to do with their functions, it may be necessary to extend a rather wider degree of immunity than the narrow construction of the immediate job which they have to do might necessarily indicate.
Having said that, I would add—and I hope this will not embarrass him—that I am in complete agreement with the other point which the hon. Member made. I think that we have the right to ask for full and complete reciprocity. If we are to take the view that a wide degree of immunity is necessary, then we are entitled to ask all those countries who are engaged with us in the same adventure to grant the same degree of immunity as that which we are granting. If we cannot demand that because we cannot control the acts of other Governments, at least we can control our own acts and need not grant a degree of immunity which goes beyond that which is granted to our own citizens doing the corresponding job, or it may be precisely the same job, in the territory of another nation. This question of limiting the scope of the immunity can be territorial as well as functional.
It would not be the slightest use, for instance, to say that the official of a United Nations Specialised Agency should have complete diplomatic immunity once he was in the United States—giving this by way of example—if they would not let him in. Obviously the immunity which we grant can apply only after the necessary visas have been granted to enable him to travel to the spot where his job is to be done, and it is at that point where one can begin to introduce limitations on the necessary immunity—limitations which we have never applied, which I hope we never shall apply and which are certainly not included in these Orders.
If I explain my point, I hope that no one will accuse me of using the opportunity merely in order to make attacks


on people or countries or governments. I am doing nothing of the kind. I only want to see what is the situation with which we are dealing.
The United States are absolutely entitled, as we are entitled, to say to themselves whom they will permit to enter their territory and whom they will exclude. We may have opinions as to the propriety or usefulness or statesmanship of it or the consequences of it to international relationships, but that is a matter of opinion only, and the right to impose conditions or the right to grant visas or the right to refuse them is obviously a matter which is part of the sovereign rights of any sovereign government and we are not entitled to criticise them. But we are bound to notice what happens, especially when we ourselves are invited to grant a complete and unlimited immunity.
What happens in these cases? The United States do not go as far as to say, in the case of persons they do not like,"We will not let you in." They say,"We will not let you in if you are coming for any private purpose," but in the case of persons who are covered by this class of diplomatic immunity they have never gone as far as to say, "We will not let you in at all." But the United States make geographical limitations to the visas.
I have known a number of cases. As I do not want to keep the House for long I will not go into more than one of them, but I will go into one of the cases in order to illustrate the kind of thing which is in my mind. There is a gentleman called Mr. Michael Scott. He is the accredited representative or delegate to a United Nations Specialised Agency of a number of African tribes. He happens to be a man who has devoted a large part of a lifetime to the protection of the equal human rights of coloured people, and I am sure that there is nobody in this House who will have anything but the highest admiration for his efforts in that direction, whether he holds with the particular thing which he does or whether he does not. No one will say that there was anything to be censured in his having these ideals and pursuing them with the utmost devotion and integrity.
But this business of human rights of coloured people can be a peculiar thing.

There is a lot of trouble in countries inhabited by coloured people. A lot of undesirable politicians make a lot of political capital out of it—Communists and other people. If they have a large coloured population of their own, it is a very delicate situation. But if this particular Agency were holding its meetings in London, and if Mr. Michael Scott were a citizen of the United States representing those people in London, he would have, and rightly have, under our arrangements complete freedom to come here and carry out his job to the best of his ability, without any kind of interference from the Government of this country.
Not so in the United States. This is where the question of reciprocity comes in. He was not refused a visa; he was granted a visa, but it was a limited visa. He could go to the actual place where the United Nations Specialised Agency was holding meetings—I am not putting an hypothetical case but an actual case—and he could walk around the streets immediately surrounding the building in New York. He could not go anywhere else in New York or anywhere else in the United States. If he crossed this kind of unilateral frontier he could be immediately arrested and deported as being an alien in the United States without permission. What is the purpose of a restriction of this kind, I cannot imagine, because, as I say, it is a unilateral frontier, and although he cannot cross it in order to talk to American citizens, American citizens can cross it in order to talk to him; so what is gained by the restriction I just do not quite follow.
What is lost by it is obvious. But again I do not find it any part of my purpose tonight to complain of it. It is not what we are discussing now and, in any case, it is not anything for which the hon. Gentleman has any responsibility. What he has responsibility for is the Order which he is asking us to make tonight. He has complete authority for that, and following the points so lucidly put by the hon. Member for Darwen, who preceded me in the discussion, I would say that if we are to have reciprocity, let us have reciprocity.
If the United States Government take what I might call, I hope not too disrespectfully, the hillbilly or fundamentalist approach to human affairs,


which is not the one most likely to lead to good human relations, we can go on with these Orders, knowing that other people will do the same and the interests of human progress will be thereby served.
But, in the present situation, is it right that we should be asked to give a complete, unfettered, unlimited diplomatic immunity to every United States citizen who comes here to discharge any of the functions covered by any one of these nine Orders, knowing that our own citizens charged with the same obligation and duty are prevented from doing it in the United States?
I hope that the Solicitor-General will not think I am making an insubstantial point. It is not as though it had happened only in this one case. It has happened in a large number of cases, some of which I know personally, and it is applied, logically enough, by the United States Government to one-half of the world: that half which happens to have Communist régimes.
It is not for us tonight to discuss the merits or demerits of Communist régimes, foreign policy, international relations, peaceful co-existence or any of these very important matters, but if one country which is a party to all these agreements refuses to grant to nearly half the countries involved in these mutual and reciprocal arrangements the privileges which it demands for its own citizens in the like case, we have a situation which this House ought to consider when it is asked, as it is being asked tonight, to give diplomatic immunities on a wide scale.
My right hon. and learned Friend the Member for Neepsend (Sir F. Soskice) went through some of the Orders and showed how very wide the immunities—at any rate, in some cases—and how remote they were from the performance of the diplomatic or quasi-diplomatic function that was attached to the person who was protected. If he has to drive from his hotel to St. James's Palace, why should he not be insured on the way in case he knocks somebody down? Why should he not have a driving licence and prove his competence to drive? How would it limit his discharge of his diplomatic functions if he were called upon to produce a third party insurance certificate when he was outside St. James's Palace?
These Orders go very far and very wide; and, as I explained at the beginning, as far as I am concerned I do not mind. I quite see that if we do it at all we might just as well do it in the broadest and most generous spirit; but if we are doing it in the broadest and most generous spirit, at least we should see before we put it into operation that our partners in the international enterprise are regarding these matters as broadly and generously as we are.

8.43 p.m.

Mr. Stephen Swingler: Like my hon. Friend the Member for Nelson and Colne (Mr. S. Silverman), I agree with the spirit and purpose underlying the Orders but, like the hon. Member for Darwen (Mr. Fletcher-Cooke) and my hon. Friend, I feel that one of the questions we have to ask tonight is whether it is really worth while to pass these Orders in the light of the recent experience we have had on this subject.
I am not qualified in any way to speak on the legal technicalities as to whether certain details of the Orders are necessary or desirable, but I speak tonight because I have had correspondence on this matter of diplomatic immunities with the new Minister of State. The result of that correspondence was to me highly unsatisfactory and it impels me to ask whether the Government really believe in the philosophy underlying these Orders.
As I understand it, that philosophy is that the servants of the organisations in question are international civil servants and ought to have a loyalty first and last to the international organisation which they serve, and that, because of that special status, they should be put above the law of the national States in which they may happen to be and be given certain immunities and privileges which others are not given. Far more important than tax exemption, or exemption from being prosecuted for driving offences, is that these international civil servants should be immune from certain pressures from certain Governments.
If we believe in the philosophy which I understand lies behind these Orders, the most important thing from which these persons should be immune is pressure from certain national Governments which happen to belong to the international organisations of which those persons are


servants. They should be immune from petty political persecution and from any judicial processes connected therewith.
What is our experience in this field and of the policy of Her Majesty's Government that leads me to ask the question whether the Government really believe in the necessity and desirability of this form of immunity for international civil servants? When any important questions or cases have arisen in the United Nations, for example, our experience is that these immunities have been waived, and that the international civil servants have been subjected to pressure and to judicial processes, persecution and heresyhunting on the part of certain Governments.

Mr. Deputy-Speaker (Sir Rhys Hopkin Morris): If I follow the argument of the hon. Member rightly, he is discussing a much wider field than is covered by these Orders.

Mr. Swingler: What I am trying to discover, Mr. Deputy-Speaker, is the purpose which lies behind these Orders, and whether we really believe in this purpose and are prepared to stand up for it. It is not worth while passing these Orders granting these diplomatic immunities if we do not believe in the purpose lying behind them and are not prepared fully to implement the Orders.

Mr. Deputy-Speaker: It seems to me that an argument on general philosophy goes much beyond the scope of the Orders, which are made under an Act which is on the Statute Book.

Mr. Swingler: When faced with so many Orders, with the various complexities involved, I should have thought that I was entitled to discuss the general principles upon which the legislation which we are asked to approve is based, and how it is to be applied in other fields.
I do not want to go beyond the Orders which we are now discussing, but I should have thought that it was relevant to ask what is the policy of Her Majesty's Government on the subject of diplomatic immunities generally for international civil servants, and how that policy is being applied today, for example, in the United Nations organisation, to the Specialised Agencies to which some of

these Orders relate. Is it worth granting these very wide immunities, which are subject to the kind of criticisms brought forward by my right hon. and learned Friend if, when such criticisms are made, we do not intend to apply these immunities and protect these international civil servants from these processes?
I was merely pointing out that in many important cases which have occurred in the United Nations organisation the experience is that when these criticisms are raised, or sanctions are applied by member Governments, the immunities are waived and they are not sufficient protection, and that therefore there is no reciprocity by other Governments. Certainly, other Governments are not applying the principles on which these Orders are based. Today that is a proven fact. One has only to look at what has been happening in U.N.O. to see that this is the fact. The question arises, do the Government of this country believe in it, because, if they do, why have they not raised a loud protest in U.N.O. against the waiving of the immunities of the servants of U.N.O. who have been subject to attack by certain Governments?
Therefore, I strongly question whether Her Majesty's Government really believe what is said in these Orders. Furthermore. I agree with my right hon. and hon. Friends that other Governments do not seem to believe in the general philosophy that lies behind them; at any rate, they have not been applied in many international organisations in recent years. Therefore, we ought to be very careful in not approving a series of Orders which suggest that the Government of this country and this House are prepared to do a number of things in this field which in actual fact will not be done either here or in other countries. From that point of view, these Orders should be subjected to a thorough scrutiny.

8.52 p.m.

The Solicitor-General (Sir Harry Hylton-Foster): I hope the hon. Member for Newcastle-under-Lyme (Mr. Swingler) will forgive me if I do not follow him in the matter of his speech, because I do not want to inflict on the House more than one speech dealing with the matters with which I have to deal. I was proposing to leave to my hon. Friend everything except one point, the problem


relating to the question, aye or no, are two of these Orders outside the powers given by the statute under which they purport to be made? Some word about that seems to be a necessary obligation, both in courtesy to the right hon. and learned Gentleman the Member for Neepsend (Sir F. Soskice) and, indeed, to the Select Committee who expressed the view that they were.
It is a strange feature that there exists a model of an Order just the same in operation in this respect as the two now questioned. I confess I have not had time to inquire into the matter, but I suspect that at some stage it must have passed the Select Committee who passed these Orders without protest and, indeed, was considered both by this place and another place without any protest about its legality being raised.
I would respectfully advise the House that the theory that the two Orders in question are ultra vires this statute does not really bear close examination. The two Orders with which we are concerned in this respect are those relating to the Customs Co-operation Council and the North Atlantic Treaty Organisation, and the matter which arises is that in each case they purport to grant, by retrospective operation, an exemption from taxation going back to a past date, in each case the date of entry into force of the particular convention or the date of signature of the particular agreement.
The matter turns on the true interpretation to be given to the statute, the International Organisations (Immunities and Privileges) Act, 1950. If hon. and right hon. Members have this statute and would look at the first Section, they will see that, on the face of it, it is clear what the Act is meant to do.
The object of the legislative exercise in the context—if one may use that phrase —is to allow the conferring by Order in Council of immunities, privileges and capacities to certain international organisations. My submission to the House would be that it is quite clear by necessary implication that there must be power to make an Order in Council under this Section having retrospective effect.
I would put it in this way. By Section 1 (1) it is made clear that the Section is only to apply to
…any organisation declared by Order in Council to be an organisation of which the

United Kingdom or His Majesty's Government therein and one or more foreign sovereign Powers or the Government or Governments thereof are members.
It follows, therefor, that membership of the international organisation is a condition precedent to the making of any Order under the statute.
It is perhaps helpful to think of this—that there are international agreements to which Governments have become parties, and an instance that occurs is the Charter of the United Nations, where one could not become a member, if one were a Government, save on the terms that one was prepared to grant the immunity and privileges the granting of which constitutes part of the constitution of that body. Therefore, under the construction that appears to appeal to the Select Committee as the right one, one has the extraordinary position that the Government under this Statute could not confer immunities and privileges unless they were a member of the organisation, and could not become a member of the organisation until they had conferred the immunities and privileges. I am at a loss to think of the right analogy to that situation, but I am reminded of the gentleman who, when asked whether he was guilty or not guilty, replied, "How can I tell until I have heard the evidence?" I submit to the House, with respect, that that really cannot be a very reasonable interpretation to put upon this statute.
It goes a little further. Over a period of many years it has been the practice, where there is a subsidiary obligation in relation to an international agreement, for the agreement to be ratified in advance of the creation of the Order which gives power to enforce the subsidiary obligation. Any other way would be inconvenient and would mean that Her Majesty's Government could not enter into quite an important agreement until they had all the legislation necessary to meet the subsidiary obligation. One ought not to adopt a construction of a statute which would have that result.
I have no desire to be controversial, but when listening to my hon. Friend the Member for Darwen (Mr. Fletcher-Cooke), the hon. Member for Nelson and Colne (Mr. S. Silverman) and, indeed, the hon. Member for Newcastle-under-Lyme, I could not help thinking, with respect, that in a sense what they were doing was to disregard the power under


which we operate this statute. It is expressly provided in the proviso to Section I that, in effect, one cannot by Order in Council under this statute give any more immunities or privileges than are required—and "required" is the word—to be conferred on the person in order to give effect to any international agreement. That is the supreme limitation of what one can do.
I submit to the House that that means that the measure, the yardstick of what one may or may not do under this legislation, by the terms of the legislation, is what the international agreement requires to be done. One thing which is quite certain is that we could not fulfil our international contractual obligation under either of these international agreements save by virtue of an Order in Council made in the form which conferred this exemption retrospectively. There is no other way that I can see in which we can confer the exemption which we contracted to apply as from an antecedent date.

Mr. S. Silverman: I wish to make the point that the word "required" was a very loose and vague word. Nor is there anything in the Act which would provide any other authority to provide what is required, other than the Minister.

The Solicitor-General: The operative word is "required." I am merely expressing a view as to the law. The word "required" is a perfectly well-known term of art designed to indicate, as I understand it, what is requisite for a given purpose. Speaking in my very new office, I should not like to defend the conferring of some immunity or privilege generously—to use the word which the hon. Member was using at some stage—because what is "requisite" and generosity do not seem to be wholly sympathetic.

Mr. S. Silverman: One of these Orders provides complete freedom from our road traffic legislation to members of an international postal union. If the hon. and learned Gentleman is right that must be ultra vires. If it is not ultra vires the hon. Member for Darwen and I are right in saying that the word "required" is wide enough to cover both a strict, narrow, rigid interpretation of what is strictly necessary and a wider view of

what might be desirable to fulfil the requirement.

The Solicitor-General: I am obliged to the hon. Member for further illustrating the point he made. The words are:
required to be conferred on that person in order to give effect to any international agreement in that behalf.
I do not want to weary the House by raising what are the particular elements in the international agreement with which we are concerned which require the provision to which the right hon. and learned Member was drawing attention. That is a matter which I prefer to leave to my hon. Friend so as not to weary the House with two speeches on one point.
To sum up what I have said, I would wish the House to take the view that when we have considered the purpose of this legislation, the conclusion is inevitable that by necessary implication the true and reasonable construction of this Statute is one which confers the power to make Orders retrospective in the fashion in which these two are.

9.4 p.m.

Mr. James Hudson: I wish to intervene briefly in a debate to which I consider the contribution of my hon. Friend the Member for Nelson and Colne (Mr. S. Silverman) was a very valuable and challenging one to some of us who feel inclined to agree with the hon. Member for Darwen (Mr. Fletcher-Cooke), who spoke of the necessity of not offering more in this provision than we obtain from other countries which ought to be equal with us in offering similar provisions to our nationals there.
I agree that that is a view very often expressed in the community. I have heard it recently when the question arose in my constituency as a result of an accident suffered by a constituent from a car carrying the corps diplomatique exemption plate and who, because of that fact, was not able to secure the sort of advantages and expectations that would have accrued had that corps diplomatique plate not been on the car.
I agree that we are not altogether free to fling away our constituents' rights now that we are discussing the wholesale extensions of privileges concerning motor


cars, taxes, and so on, to a very largely increased section of the visitors to these shores. Many of my constituents, if they knew that I had readily thrown those rights away, would certainly want to know from me something more about it.
All the same I would say, in reply to the contention of my hon. Friend the Member for Nelson and Colne, that if we are to give privileges to diplomats and international civil servants to carry on their work well, we are bound to give them free from the sort of inhibitions which they would feel if compelled in every sense to obey all the rules in all the details that are imposed, and rightly imposed, on the citizens of our own nation.
For that reason, I think it is good business in this matter, as in many other matters concerning international questions, to proceed in the mood to which my hon. Friend referred and to heap coals of fire on the heads of opponents rather than wait until they give the same privileges which we feel bound to offer to them under international agreements. If we are always going to wait until the other fellow does the right thing before we do so, there will be a long time-lag in the world before we make much progress towards the better international community about which we are always talking in this House.
While I am taking that—as some may think—rather airy view of our responsibility, yet I do take that view, but feel it right to say at the same time that the Americans should not continue the sort of policy that they are pursuing if they expect us, on an occasion like this, to do the things which we shall do in agreeing to these Orders. I hope that some account will be taken on the other side when the further treatment of the Rev. Michael Scott, which has been referred to at length tonight, is being considered. I hope that some account will be taken of the British way of doing things in the hope that perhaps some better attitude may be induced there as well.

9.9 p.m.

Dr. H. Morgan: This is a very important matter, and I beg the Government to take these Orders back and consider them afresh from the point of view of our history and of how they will affect our citizens in different parts of the world who find themselves

temporarily in countries which are not within the purview of the British Empire. I beg the Government to look at this matter again. It is not just one principle which is involved in the Orders; about four, five or six are involved in relation to personal liberty.
I know that almost every view which the Government hold is opposed to mine, but I ask them, as a humble Member of the House, on an occasion like this, when we are concerned with problems which touch almost every human liberty which we know in the modern world, to take these Orders back and ask their legal advisers to consider them again from the national, international and colonial points of view. I ask them to consider whether it is worth while introducing such Orders in circumstances in which we cannot give valid reasons for our actions.
This is a matter on which I feel strongly although I have not had time to prepare my remarks. Every citizen who loves his British citizenship and his freedom, everyone who is connected with the Empire or Commonwealth, may find himself affected by legislation of this kind. I ask that these Orders be taken back and reconsidered from the wider humanitarian point of view; from the point of view of men seeking freedom who may find that legislation of this kind, if passed, may be used against them.

9.12 p.m.

Mr. Turton: With the leave of the House, I should like to reply to some of the points which have been made, and especially those put by the right hon. and learned Member for Neepsend (Sir F. Soskice). I am most grateful to those hon. Members who accorded me a welcome in my new office. During the speech of the hon. Member for Nelson and Colne (Mr. S. Silverman), I thought that for the first time in the last 19 years he was beginning to appreciate some of my remarks and was agreeing with them. I thought that perhaps he was mellowing and would be in future prepared to agree more with my views.
I have been asked a number of questions which I will try to take seriatum, with one exception, which I will deal with at the end. The right hon. and learned Gentleman asked first how many persons in this country will come under these Orders. I consider that very important. The House will recall that, with the excep-


tion of the International Sugar Council, the headquarters of the organisations are not at present in this country. So long as those headquarters are not in this country, and the meetings are not in this country, it is impossible to say the number of those affected. It will be limited to those representatives from other countries travelling through this country in order to go to a meeting.
There are three cases where I can give figures. The first is the International Sugar Council where the headquarters are in London. In that case there are two persons not being citizens of the United Kingdom and Colonies who will receive the tax exemption. In the case of the North Atlantic Treaty Organisation there are 114 persons of various nationalities, including 52 citizens of the United Kingdom and Colonies, who will receive immunities and privileges, but only 36 of their number, of whom 30 are citizens of the United Kingdom, are expected to receive tax exemption. I think the figure of 200 quoted in the Report of the Public Accounts Committee dealt with the number of claims and not with the number of persons. In respect of the Customs Cooperation Council there are two persons, both United Kingdom citizens, who will receive tax exemption by virtue of the retroactive Clause. That is the full information that I can give on the numbers affected.
I should like to deal with a point, put by my hon. Friend the Member for Darwen (Mr. Fletcher-Cooke) and many others, about reciprocity. I do not intend to deal with every Order, but what has happened in all of them is that a considerable number of countries have already ratified and acceded. In some cases there are still other countries to accede, but we are not, to use the phrase of my hon. Friend the Member for Darwen, "blazing a trail." We are coming into the agreements after other countries in all cases. I rather wish that we had blazed a trail rather more quickly.
I will give two examples. In the North Atlantic Treaty Organisation there are 14 member States, eight of which have ratified. If the House approves the Order, we will be the ninth. To take the most recent example of the International Sugar Council, there are 26 Member States and 22 have ratified. That is a fair indication. I expect that the right hon. and

learned Gentleman would like me to mention the Universal Postal Union. Seventeen have so far ratified, although there are some 83 Member States. That is the broad picture on reciprocity.
I come to the third and, I think, the main point which the right hon. and learned Gentleman made on the Universal Postal Union Order. He asked why it was that, when this Order was introduced in June, 1950, and withdrawn, we now wanted to go ahead with it. I am in a little difficulty. I do not want to go in detail into the proceedings of another place. It was of course in a preceding Session. I think that the right hon. and learned Gentleman will remember that Lord Jowitt, then Lord Chancellor, withdrew the Order in order to give time to reconsider the whole position. He apologised for the fact that he had not had time to study the position.
Since that time in 1950 we have studied the position and we have given the advice —the advice I gave today—that, in the view of the Government, it would be wrong to exclude the Universal Postal Union and the other two organisations from the benefits of the Convention signed in 1947. The House will recall that in that Convention there were some 10 Specialised Agencies to which we undertook to give these immunities. In the case of seven they have already been given. It is wrong that these three should now be denied them.
The right hon. and learned Gentleman said that the words had a wide application. The words in the Order are:
Immunity from legal process of every kind in respect of words spoken or written and things done or omitted to be done by them in their capacity as representatives.
The reason for that is that those very words, or words of very similar character, occur in the International Convention, of which Section 19 of Article 6 says:
Officials of specialised agencies shall… be immune from legal process in respect of words spoken or written and all acts performed by them in their official capacity.
If the right hon. and learned Gentleman will look at the Act under which these Orders are framed, he will see in paragraph 10 of the Schedule that the immunity which we shall give is:
Immunity from suit and legal process in respect of things done or omitted to be done in the course of the performance of official duties.


Therefore, we are here acting as we are required to do if we accede to the Convention.
My hon. Friend the Member for Darwen asked why I said we were obliged to ratify. He rather accused me of putting that forward. He explained at the beginning of his speech that he had not been present during the whole of my speech. That was probably the reason why he made his allegation.
I was submitting the reasons why I thought the House should ratify the agreement; in the case of the three Specialised Agencies Orders, I pointed out that we had signed the Convention and I thought it only right that we should ask the House to ratify because we were committed by the Convention signed in 1947. If my hon. Friend refers to my speech in HANSARD, he will see that I have not over-stated the case. I was giving reasons, which coincided very largely with those given by the hon. Member for Nelson and Colne, why I thought it was in the national and international interest that these Orders should be agreed.
The final and most important point is that I was asked by the right hon. and learned Gentleman whether I could, on behalf of Her Majesty's Government, give an assurance that I was personally satisfied, and that my hon. and learned Friend the Solicitor-General was personally satisfied, that the privileges which are conferred by these Orders do not go beyond the obligations assumed in the agreement. I can tell him that since I was appointed to this Office I have spent most of my time ascertaining whether the agreement has been scrupulously observed, and I give the House the assurance that in my view it has been most scrupulously observed.

9.23 p.m.

Mr. Ede: I congratulate the hon. Gentleman upon obtaining his present office. I can only hope that he will have a rather better case to defend as a rule when he appears at the Dispatch Box than the one which he has had this evening. Even the intervention of the Solicitor-General did not quite convince me on the point whether two of the Orders were ultra vires or not. However, even if we confirm these Orders tonight, if they are ultra vires they will remain ultra vires and the court may so decide.
I could not help thinking that the hon. and learned Gentleman's jest about the dilemma and the solution to it which he proposed was hardly in accordance with his own professional experience. Has he never had to defend a man to whom he has said "Plead not guilty at this stage," and then at a later stage has said to him, "In view of what we have heard, I advise you to plead guilty now"? That is what has happened on several occasions in cases which I have heard, although I have never had the hon. and learned Gentleman as a barrister in front of me.

The Solicitor-General: The right hon. Gentleman knows that he ought to caution me at this stage.

Mr. Ede: It is a pity that the hon. and learned Gentleman did not caution himself before he started. In these matters, we do get some very strange metaphors. My hon. Friend the Member for Ealing, North (Mr. J. Hudson) always amazes me. When one intends to treat someone kindly, why one should say that one should heap coals of fire upon his head I cannot understand. I recall the story of the wife who approached her minister and described her domestic difficulties to him. He told her, "I should heap coals of fire upon his head," whereupon the woman replied "I have never tried that, but I did once try a kettle of boiling water."
I want to ask the hon. Gentleman whether we are to understand that the members of the present Government, who attacked the Labour Government in the House of Lords over this Universal Postal Union Order, now retract from the position they then took up, because they were most emphatic. Let me read what Viscount Swinton said on 24th July, 1950:
Having listened to this debate, and having read the Order, I am bound to say that I echo what my noble and learned Friend has said.
The noble Lord was referring to the late Viscount Simon. He went on:
I was not a Minister for so long as he was, but I have been a Minister, on and off —and more often on than off—for the last thirty years, and it never occurred to me, when going all over the world to attend diplomatic conferences (and I have attended as many as most people) that I ought to have diplomatic privilege. I have never had it in my life. I have had great courtesy, and the convenience of an official motor car; but it


never occurred to me, when I was in Rapallo, that if I drove my girl friend round the coast road"—
I really would like to see the noble Lord driving his girl friend round the coast road, and I would like to see the girl friend, too—
—and ran over some respectable Italian citizen, I could expect to enjoy diplomatic immunity.
The late Lord Simon here interrupted to say:
You must be travelling to or from the conference.
Viscount Swinton replied:
Certainly. There are many roads; and one may take the high road or the low road, and take any companion.
In view of the kind of language used in those days, and of the remarks made by Lord Simon when he pointed out that one must be travelling to or from the conference, and in view of the fact that somebody coming from a conference in Switzerland can land at Dover and drive across the country to Liverpool and, during the whole of that time, can enjoy diplomatic immunity, do we now understand that all the objections then raised are now waived?
May I take this further point, which was made by Lord Simon? He said:
Indeed, if we turn to the next page, we see that under Section C, 'High Officials of the Union,'—the Director or his deputy and the like—this immunity would apply not only to the high official but to his wife, if she were driving the car, or his son under twenty-one if he were driving. Not only so, they would not even be exposed to a claim for damages for injuries which they had caused." —[OFFICIAL REPORT, House of Lords, 24th July, 1950; Vol. 168, c. 558–563.]
Was that genuine, or was it just an ebullition of party feeling intended to embarrass the Government of the day? I hope the House will agree to the Order tonight, and that we may assume that the members of Her Majesty's Government who adopted that line in the House of Lords now sincerely repent for attacking this immunity for so long.

Question put, and agreed to.

Resolved,
That an humble Address be presented to Her Majesty, praying that the International Organisations (Immunities and Privileges of

the Council of Europe) (Amendment) Order, 1954, be made in the form of the draft laid before this House on 12th May.

Resolved,
That an humble Address be presented to Her Majesty, praying that the International Organisations (Immunities and Privileges of the European Payments Union) Order, 1954, be made in the form of the draft laid before this House on 12th May.—[Mr. Turton.]

Resolved,
That an humble Address be presented to Her Majesty, praying that the International Organisations (Immunities and Privileges of the International Civil Aviation Organisation) (Amendment No. 2) Order, 1954, be made in the form of the draft laid before this House on 12th May.—[Mr. Turton.]

Resolved,
That an humble Address be presented to Her Majesty, praying that the International Organisations (Immunities and Privileges of the International Telecommunication Union) Order, 1954, be made in the form of the draft laid before this House on 12th May.—[Mr. Turton.]

Resolved,
That an humble Address be presented to Her Majesty, praying that the International Organisations (Immunities and Privileges of the North Atlantic Treaty Organisation) Order, 1954, be made in the form of the draft laid before this House on 12th May.—[Mr. Turton.]

Resolved,
That an humble Address be presented to Her Majesty, praying that the International Organisations (Immunities and Privileges of the Universal Postal Union) Order, 1954, be made in the form of the draft laid before this House on 12th May.—[Mr. Turton.]

Resolved,
That an humble Address be presented to Her Majesty, praying that the International Organisations (Immunities and Privileges of the World Meteorological Organisation) Order, 1954, be made in the form of the draft laid before this House on 12th May.—[Mr. Turton.]

Resolved,
That an humble Address be presented to Her Majesty, praying that the International Organisations (Immunities and Privileges of the Customs Co-operation Council) Order, 1954, be made in the form of the draft laid before this House on 17th May.—[Mr. Turton.]

Resolved,
That an humble Address be presented to Her Majesty, praying that the International Organisations (Immunities and Privileges of the International Sugar Council) Order, 1954, be made in the form of the draft laid before this House on 30th July.—[Mr. Turton.]

To be presented by Privy Councillors or Members of Her Majesty's Household.

INSURANCE CONTRACTS (WAR SETTLEMENT)

Motion made, and Question proposed,
That the Draft Insurance Contracts (War Settlement) (Finland) Order, 1954, a copy of which was laid before this House on 13th July, be approved.—[Mr. H. Strauss.]

9.32 p.m.

Sir Frank Soskice: This Order is designed apparently to bring into operation an agreement made with reference to contracts of insurance and reinsurance entered into before the war and in the early stages of the war, and made pursuant to the Treaty of Peace with Finland. It is an Order of very considerable complication. It seems to provide what is to happen to these contracts of insurance and reinsurance as the result of the intervention of the war since these contracts were made. I venture to suggest that the Minister should give some short explanation of the general framework of the Order and what it is intended to achieve.

The Parliamentary Secretary to the Board of Trade (Mr. Henry Strauss): I am glad to respond to the very reasonable request of the right hon. and learned Gentleman. This Draft Order and the next one upon the Order Paper seek the approval of Parliament for agreements which have been drafted and agreed between our insurers and the Finnish insurers in the one case and our insurers and the Italian insurers in the other. These two agreements, reached by the insurance markets, have been the subject of Inter-Government Agreements but, of course, further action is necessary, as the right hon. and learned Gentleman appreciates, in order to make them part of our own municipal law.
At the end of the Second World War, in certain of the Treaties, including the two Treaties with which we are concerned tonight with Italy and Finland, instead of setting out all the provisions governing contracts of insurance and reinsurance, provision was made that they should be the subject of separate agreements. Those separate agreements, made between the insurance markets of the respective countries, were embodied in Inter-Government Agreements, and it is in respect of two of these agreements that we seek approval tonight for making them part of our municipal law. This is to be done under the Act mentioned in these Orders.

I think the right hon. and learned Gentleman would like me to tell him in a few words the main principles that these rather complicated provisions embody.
The main principle is this—and it is a principle which has been embodied in other peace statutes, both after the First World War and after the Second World War: direct contracts of insurance between an insurer and an assured are maintained but contracts of re-insurance are terminated at the beginning of the war. As the right hon. and learned Gentleman will see, the first class covers contracts between an individual and an insurer. The second class covers contracts between two insurers. Of course, if a reinsurance contract is cancelled or terminated, the original insurer may find himself answerable for larger risks than would ordinarily be prudent, but he can generally effect another re-insurance. An individual, on the other hand, if his contract of insurance were terminated and broken, might be subject to hardship or loss.
That is the basic idea behind the decision to preserve the latter class, allowing what is the common law and the ordinary statute law to operate in the former class. The details have been worked out between the very expert gentlemen who represent our great insurance interests and the insurers in the two countries concerned. The House will welcome the fact that that agreement has been reached. The complete agreement which has been reached has already been subject to inter-Governmental agreement and the sole purpose of these two Orders is to make the agreements reached good English law and part of our own municipal law.

Question put, and agreed to.

Resolved,
That the Draft Insurance Contracts (War Settlement) (Finland) Order, 1954, a copy of which was laid before this House on 13th July, be approved.

Draft Insurance Contracts (War Settlement) (Italy) Order, 1954 [copy presented 13th July], approved.—[Mr. H. Strauss.]

ADJOURNMENT

Resolved, "That this House do now adjourn."—[Mr. Kaberry.]

Adjourned accordingly at Twenty-Three Minutes to Ten o'Clock.